I’m Reed Bloodworth, the managing partner of Bloodworth Law with offices in Orlando, Florida and Winter Haven, Florida.
Today I am going to talk to you about what happens if someone is persuaded to enter into a contract based on fraudulent information. This is known as fraudulent inducement.
What is Fraudulent Inducement?
What is fraudulent inducement? Fraudulent inducement occurs when one person convinces another person —through a deception — that something false is true and that the resulting contract is based upon that deception.
In Florida, the law provides certain protections when someone makes a fraudulent statement that causes you to enter into a contract.
Fraudulent inducement is the name of a cause of action in a Complaint when a person has been tricked or defrauded into entering into a contract or transaction.
A person has committed fraud in the inducement if:
- The person made a false statement about a material fact;
- The person knew or should have known that the representation was false;
- The Person made the statement in order to induce another person to act; and
- The other person’s reliance on the statement caused him or her an injury.
For example, when the seller of a business cooks the books and inflates the bottom line of that business to convince a buyer to purchase a business, that’s fraudulent inducement.
Another example, if you entered into a contract because the other party gave you false information or omitted relevant facts, such as — business is dead during the summer and fall causing you great financial losses – that could be fraudulent inducement.
In these cases, the usual remedy is to have the contract rescinded, effectively voiding the contract and returning the parties to the position they were in prior to entering into the contract – meaning the plaintiff gets his or her money back.
If you’re a business owner who wants to protect your future business interests, you should hire a recommended attorney for a consultation.
Again, I’m attorney Reed Bloodworth, the managing partner of Bloodworth Law. If you suspect you were given fraudulent information before buying a business, give me a call. Let’s talk about how Bloodworth Law can help you, your family, or your business.