What Constitutes Fraud in California?

It is common in lawsuit for breach of contract, the non-breaching party also brings a claim for fraud. Fraud is a very general legal term.  More importantly, there are several different types of fraud that can be committed.  One type of fraud, which is typically the most common, is intentional fraud or deceit.

Intentional fraud and deceit consists of a misrepresentation of a material fact made to the non-breaching party that lead the non-breaching party to enter into the contract.  In order for a party to sue for intentional fraud and deceit, the person making the false representation had to know at the time the representation was made that it was false and the non-breaching party had to rely on the misrepresentation.

Another type of fraud is referred to as concealment fraud.  Concealment fraud arises when a party to an agreement conceals an important fact from the other party, which had the other party known of this concealed fact s/he would not have entered into the agreement.   As a result of this concealment, the defrauded party is harmed.

A less common type of fraud is called promissory fraud.  Promissory fraud occurs when a party makes a promise that is essential to agreement, but never intends to follow through with the promise. The victim’s reliance on the promise causes her to enter into the agreement.  As a result of the promissory fraud, the victim is harmed.

 

Once the type of fraud has been identified, the party claiming to be defrauded must allege specific facts in the complaint in order to for his or her fraud cause of action to survive.  Unlike a negligence cause of action or breach of contract, a cause of action alleged in a complaint must specifically state each element for the type of fraud you are alleging.  Moreover, the facts must be specific and clearly plead, otherwise the judge hearing your case will dismiss the cause of action.  For example, in a claim for intentional fraud and deceit, the victim must specifically state the representations that were made to him or her, who made the statements and when  the statements were made so the court can determine whether the statements were material and induced reliance.

Even if the Court dismisses your claim for fraud because the judge does not find that the allegations in your complaint are specific enough or material to the transaction, that does not you have to forego your claim for fraud.  Over the course of the lawsuit, additional facts may be discovered that support your claim for fraud.  If so, then your attorney will need to make a motion allowing you to amend your complaint alleging fraud.

If you believe you have been defrauded, contact the attorneys at The Rinka Law Firm (310-556-9653) and we can advise you on whether you have a viable case.

 

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