What is Fraud?

This can be either a civil or criminal wrong. Fraud includes anything intended to deceive, including all statements, acts, concealment's, and omissions involving a breach of legal duty, trust or confidence which results in injury to one who justifiably relies.

You have been a victim of fraud when someone:

  • Lies to your
  • Conceals from you
  • You justifiably rely on the lie or concealment
  • You are hurt one way or another because of the lie or concealment

What happens when fraud occurs. If you are a victim of fraud:

  • You can sue for compensatory damages
  • You can sue for punitive damages
  • You can cancel contracts
  • You can get your money back
  • You can get restraining orders
  • You can report it to the police

If you have been accused of fraud:

  • You can risk all of the above
  • You can have judgment taken against you
  • You can have a deed set aside
  • You could lose benefits from a will or living trust
  • You could go to jail!

The facts which will constitute fraud must be determined from the circumstances of each case, and fraud may be proved or disproved from direct evidence or inferred from circumstantial evidence. The fraud of an agent may make his principal liable.

Fraud actions can be based on negligent representations as well as intentional misrepresentations. Contributory negligence is not a defense. Mere puff or opinion as to a future event is, in most cases, mot a misrepresentation, and therefore, not fraud.

The statue of limitations for fraud is three (3) years from the time when the aggrieved party should have reasonably discovered the facts constituting the fraud. The action must be filed in court prior to that time to avoid the action being barred.

Where a plaintiff has been induced to enter into a contract by defendant's fraud, the plaintiff may affirm the contract and sue for damages or sue to cancel the agreement and sue for damages. The plaintiff must justifiably rely on the lie or concealment. In other words, the lie must be believable. The issue in determining justifiably of reliance is whether the person claiming reliance was justified in believing the lie in light of his or her own knowledge and experience. No justifiable reliance, no fraud.

Where there is a special relationship between the parties, doctor, lawyer, accountant, trustee, etc., the party has a right to rely on the representation without further inquiry. The same is true where the person telling the lie has superior knowledge and the plaintiff is ignorant of the facts, for instance, sellers of real property or a business. Those who manufacture products and falsely advertise them to the public as safe or fit for a particular purpose can be sued by those suffering damages as a result of thereof.

Once a plaintiff discovers the fraud, and decides to cancel the contract, the plaintiff must quickly give notice of his or her desire to cancel. If this notice is not given within a reasonable time, the right to cancel may be lost and the plaintiff left to sue for general and punitive damages where proper.

Be aware of confidence schemes where a purchaser will buy a business with a high purchase price and low down payment then deplete the inventory and declare bankruptcy, or the seller of real property on unstable ground offers the property at a seemingly low price. There are as many schemes as there are schemers.

Let us help you, hopefully, before fraud occurs and certainly after you have been hurt.