Fraudulent Inducement

Under some circumstances, fraud and deceit are actionable. Plaintiffs hoping to recover damages for fraud need to prove several elements by clear and convincing evidence. This is a fairly high burden of proof, higher than the standard in many civil cases, but not as high as the burden of proof in criminal cases. It requires you to show that a fact is substantially more likely to be true than not true. If you believe that you were harmed by fraudulent inducement, the New York City fraud attorneys at The Linden Law Group, P.C. may be able to represent you in a lawsuit.

In order to recover damages for fraudulent inducement, you will need to prove by clear and convincing evidence each of the following elements:

• The defendant represented something to you regarding a material fact;
• It was a false representation;
• The defendant knew that it was false;
• The defendant made the representation in order to induce you to rely on it;
• You did actually rely on it;
• You did not know that it was false; and
• You sustained damages as a result.

With this type of claim, you need to be especially careful to plead all of the fraudulent circumstances as well as your reliance specifically.

If you had the means to learn the truth by using ordinary intelligence but simply do not use those means, you cannot claim that your reliance was justifiable. For example, if you were scammed by a used car salesman who told you that the mileage on a car was 40,000, but you failed to look at the odometer, which would have told you that it was 70,000, you would not be able to establish justifiable reliance. You also cannot claim that you justifiably relied on a representation if the representation is negated by contract terms. You are expected to use ordinary diligence and read a contract. And you are expected to understand what you sign.

For a fraudulent inducement claim, you need to allege that the defendant made a false representation of a present and material fact. Generally, it is not enough to point to the fact that the defendant did not perform as promised for the purposes of showing a false statement. That would simply be a breach of contract. When somebody says that they will perform an act in the future, it is fraudulent if the statement was uttered or written with a preconceived but unrevealed intent not to perform the promise. A Ponzi scheme is another example of when a fraudulent inducement may arise.

The context of the false representation can have a big impact on a fraudulent inducement claim. Suppose, for example, that you were persuaded to leave a lucrative job to take another job with the defendant, but the job turns out to be much less attractive than the way that it was represented by the defendant. In this context, it is important to note that employment is at will in New York, which means that the employer is permitted to terminate an employee at any time and for any reason, absent an agreement otherwise or a violation of public policy. If your written contract makes a specific statement of present fact that turns out to be false, you may have a basis to claim fraudulent inducement.

It is difficult to prove fraudulent inducement, but it can be done with the help of an experienced and skilled trial attorney when the right facts are shown. If you do successfully prove your claim, the measure of damages is an indemnity for your actual pecuniary losses caused by the fraud. The damages are meant to compensate for what you lost but not for what you might have gained had the misrepresentation been true. For example, you cannot recover potential profits; you are limited to the damages necessary to put you back in the position in which you were before the fraud.

If you suffer harm due to fraudulent inducement, whether it is in an arms-length transaction or by a friend or family member in person or by a stranger online, you should hold the responsible party accountable. It is important to retain experienced trial attorneys to bring this challenging type of claim. Sue to get your money and damages back. The Linden Law Group, P.C. represents victims of fraud in Manhattan, Queens, the Bronx, Brooklyn, and Staten Island — all five boroughs of New York City. We also represent residents of Nassau and Suffolk Counties, among other areas of Long Island. Contact us at (212) 537-6612 or through our online form. Our firm fights fraud head-on.