Negotiating and securing contracts is key to your business’s success. When you engage in that process, you expect all parties to negotiate in good faith. But that doesn’t always happen. When the other side acts wrongly, then you could be unfairly taken advantage of, putting you and your business at risk of missing opportunities and losing money. That can be stressful to think about, but it can be even more daunting when you consider your rights and interests are only going to be protected if you take action.
One issue that you’ll want to look out for in the world of contracts is fraudulent misrepresentation. If left unchecked, this act can have devastating consequences for you and your business.
What is fraudulent misrepresentation?
The term “fraudulent misrepresentation” refers to a situation in which one party intentionally (or with reckless disregard for the truth) makes a false or misleading statement or makes a statement of fact as part of an effort to induce another party to enter into a contract. Because of the misrepresentation, the party that was duped into the contract ends up with something other than what they bargained for. This is unfair, which is why those who are victimized by fraudulent misrepresentation can take legal action to try to make themselves whole again.
How to prove fraudulent misrepresentation
If you’ve been cheated in a contractual arrangement and think that you were subjected to fraudulent misrepresentation, then you need to know how to prove your case. Here are some tips for doing that:
- Retain communications: One of the biggest challenges in a fraudulent misrepresentation case is proving intent. You’ll have to demonstrate that the other party either knowingly made a false or misleading statement, or that they acted recklessly in making the statement. Circumstantial evidence might help you here. So, scour any communications that you’ve had with the other party to see if they show the problematic statement that was made or their intent in making it.
- Subpoena internal records: If the communications that you’ve had with the other party are inadequate to prove your case, then you might need to look at the other party’s internal communications and records. This documentation will help you figure out what the other party knew at the time the statement was made, and you might find evidence indicative of intent.
- Focus on detrimental reliance: Another big piece of your fraudulent misrepresentation case is demonstrating that you relied on the false statement to enter into the contract, and that you were harmed as a result. Anything that commemorates your decision-making process regarding the contract can go a long way here, but you’ll also want to make sure that you track your damages, including missed opportunities from other contracts that you could’ve secured if you hadn’t been induced to the fraudulent contract.
There are probably several other steps that you can take to build your fraudulent misrepresentation case, but the specific path you take is going to depend on the unique circumstances of your case. You can talk through your situation with your attorney to learn more about how to position yourself for success.
Do you have questions about how to address your contract issue?
If the answer is “yes,” then you should take the time needed to find the answers you need. Only then will you be able to make the fully informed decisions that are best for you and your business. Although educating yourself on the law and business litigation processes can be stressful to think about, help is available if you need it.