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Pasadena Fraud and Negligent Misrepresentation Lawyer

When business deals go extremely sour, parties may seek more severe sanctions than merely claiming breach of contract. If one party truly believes that a counterparty provided false information in order to either induce them to sign on to a contract they otherwise would not have agreed to, or generally to harm their business, then they may allege fraud or some other form of misrepresentation. A seasoned lawyer can help your company either defend against allegations of fraud or misrepresentation or bring appropriate fraud claims against a business that harmed you.

The Elements of Civil Fraud

Fraud generally requires the following elements:

  • A misrepresentation;
  • Knowledge of falsity;
  • An intent to defraud;
  • Justifiable reliance by the victim; and
  • Resulting damage.

Defending against a claim of fraud typically involves poking holes in one of the required elements. Some aggressive business people will try to tack on a fraud claim where there was simply a breach of contract or some other problem with the deal. And, moreover, even if your company did provide false information to the other party, a seasoned business litigation attorney can help you demonstrate that you did so unwittingly and without the intent to defraud or harm your counterparty. Not every mistake is fraud. Additionally, a mere opinion or “sales talk” does not constitute an actual misrepresentation.

On the other hand, in order to prove a claim of fraud or misrepresentation, you must have a solid case that the other party not only deceived you but did so knowingly and harmed you in so doing. A savvy and dedicated business litigation attorney can help you comb for the documents necessary to show not only that the other party wronged you, but that they did so intentionally and that your business suffered as a result. If they made representations with no basis in fact to support those representations, then they should be held liable for the damage they have caused your business.

Fraud vs. Negligent Misrepresentation

Fraud has a specific definition in the law, found in California Civil Code sections 1572, 1709, and 1710. Fraud is a serious allegation and requires, at the least, a reckless disregard for the truth of the matter. Fraud typically involves allegations that one party intentionally provided false information to another party with the intent to deceive them and harm either their business or another company.

Negligent misrepresentation, on the other hand, is a more mild form of the same type of claim. Negligent misrepresentation is appropriate where a party did indeed provide false information to a counterparty but did so with a sincere, although unreasonable, belief that the information was true. Often negligent misrepresentation will arise when a business claims to possess certain skills or capacity but is unable to follow through on its end of the bargain. Rather than being intentionally misleading, a company guilty of negligent misrepresentation is more often careless about how it represent the business and its capacity.

If fraud can be proven, the victim will likely be able to seek significantly higher damages. Because the law is written to punish and deter fraudulent conduct, fraud victims are able to seek punitive damages in addition to the damages necessary to merely compensate the victim. Punitive damages act as a multiplier, awarded on top of the actual damages amount suffered by the victim. The measure of damages is also generally more liberal under a fraud theory.

Contact Andrew Ritholz for Help with a Claim of Fraud or Misrepresentation Regarding Your Pasadena Business

At the Law Offices of Andrew Ritholz, we have the years of business litigation experience you want on your side when it comes to making sure that a fraud or negligent misrepresentation issue does not impact your daily or long-term business goals and needs. Pasadena fraud and negligent misrepresentation issues are just one of the many litigation and non-litigation matters the Law Offices of Andrew Ritholz can help you with. If you are dealing with an anticipatory or actual fraud or negligent misrepresentation issue, do not hesitate to contact us today.

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