What is Fraudulent Misrepresentation?

What is fraudulent misrepresentation? An example of fraudulent misrepresentation is when one party is negotiating with another party to enter into a contract to buy a business, but Party No. 1 says things that are not true to Party No. 2 in an effort to get Party No. 2 to enter into a contract with them to buy the business.

Party No. 2 later discovers that these things are untrue. And Party No. 1 can’t perform according to the contract.

Party No. 2 would sue Party No. 1 for Fraudulent Misrepresentation related to the statements that he or she had made before the contract was entered into.

Fraudulent Misrepresentation vs. Negligent Misrepresentation

Founder and CEO of Bloodworth Law, attorney L. Reed Bloodworth, and the Bloodworth Law team handle fraudulent misrepresentation cases for clients across the state. Florida recognizes separate theories of recovery for damage occurring as a result of misrepresentation.

Is Fraud Intentional?

One basis of recovery is for intentional fraudulent misrepresentation because technically, fraud is intentional.

Negligent Misrepresentation

And the other is for negligent misrepresentation. In other words, under Florida law, a party may be liable for misrepresenting a material fact even if the misrepresentation was a mistake, instead of intentional.

Four Elements Must Be Proven

Florida has four elements that must be proven in order for a plaintiff to be successful in asserting fraud as a claim and a lawsuit.

#1: Statement About A Certain Fact

The first element is that the person committing the fraud makes a statement about a certain fact.

#2: Knows Statement Is False

The second element is that person knows his or her statement is false.

#3: Reliance Upon Statement

And third, the purpose for which a person is making that false statement is to get someone else to rely upon that statement, usually for financial gain.

#4: Plaintiff Injured Financially

Finally, because of the reliance upon that statement, the plaintiff was injured financially.

Must Be About a Material Fact

Not every false statement can lead to a claim of fraudulent misrepresentation. The statement must be about a material fact. A fact is considered material when it plays an essential role in the decision-making of an individual. There must be detailed, factual evidence to support each of the four elements of the claim.

An Example

An example could include probate fraudulent misrepresentation when an interested party has a claim.

However, to substantiate the claim, a plaintiff must be able to provide detailed factual evidence to satisfy each of the four elements of fraudulent misrepresentation.

Situations where fraud may occur:

• Power of attorney abuse
• Executor or trustee fraud
• Formal accountings
• Undue influence, coercion, or fraud in the creation of a trust or will
• Will contests and administrator appointment hearings

If you believe that someone has misrepresented information at any stage of the probate process or in the creation of a will or trust, or in a business or real estate contract you should contact a probate or a business attorney.

In any legal dispute you decide to handle alone without guidance from an attorney, you may make a bad situation worse. Bloodworth Law is a 2020-22 U.S. News & World Report “Best Law Firm.” Talk with Reed and find out how Bloodworth Law Commercial Litigation Team can help you, your family, or your business.