Contract Fraud

Fraud in contracts occurs more frequently than you might think. We deal with persons in a business context and enter into contracts based on good faith. Good faith is, however, not always their intent. Contract fraud occurs whenever someone deceives you to enter into the contract, to their advantage.

When this occurs, and if your damages are substantial, you should consult with an attorney experienced in handling contract fraud and other related fraud claims. Timothy Norton of Norton & Associates has 30 years of experience handling a wide variety of fraud cases, including a $70m punitive damages award for fraud and misrepresentation.

California Fraud Statutes

Under California law, there are several statutes that very specifically define and describe fraud and its various types There are basically three types of fraud: Fraud by intentional misrepresentation, fraud by concealment and fraud by false promise. Another type of fraud is negligent misrepresentation: all discussed below.

Fraud by Intentional Misrepresentation

Fraud by intentional misrepresentation is exactly that: Where someone with a duty to represent material facts accurately, completely and truthfully, and intentionally misrepresents the facts that they know not to be true to another person who in reliance on those misrepresentations of fact, acts to their detriment, such as agreeing to enter into a contract in reliance on false statement or misrepresentations.

Fraud by Concealment

Fraud by concealment is a very common form of fraud, that occurs in situations where someone has an affirmative duty to disclose certain material facts and knows of certain facts that this person has a duty to disclose to another and either conceals those facts, or as is often the case, is silent where they have a duty to speak and disclose, and the other person relies on the absence of information silence on that particular subject, again to their detriment, such as agreeing to enter into a contract in reliance on the silence.

A duty to speak may arise in various ways. It may be imposed by a statute, it may be voluntarily assumed by the contract, it may arise out of the relationship between the parties, or it may arise from conduct. A duty to speak and disclose may arise in a fiduciary relationship. Even if a fiduciary relationship is not involved, a non-disclosure claim may arise when a party makes representations but fails to disclose additional facts that materially qualify the facts disclosed. And, where there is no duty to speak on a matter if he undertakes to do so, must not only state the truth but also not suppress or conceal any facts within his knowledge which materially qualify those stated.

Fraud by False Promise

False promise is, as the phrase suggests, simply where someone makes a false promise in order to lure another into relying on that promise, which the person making the promise has no intention of performing. Many promises are not kept, but where a promise is made and the person making the promise makes no effort to perform, doesn’t prepare to perform, or doesn’t indicate readiness to perform, this is often the best evidence that they never intended to perform in the first place. False promise is also called promissory fraud.

Fraud by Negligent Misrepresentation

Negligent misrepresentation is where the defendant makes false statements, honestly believing they are true, but without reasonable ground for such belief. To be actionable deceit, the representation need not be made with knowledge of actual falsity, but need only be an assertion, as a fact, of that which is not true, by one who has no reasonable grounds for believing it to be true and made with intent to induce reliance by the recipient of the representation to alter his or her position to their detriment.

Constructive Fraud

Constructive fraud is a more complicated type of fraud, that may occur in situations where there is a fiduciary relationship and a fiduciary duty to disclose material facts and doesn’t. This may constitute constructive fraud.

Working with A Contract Fraud Attorney

If you have been defrauded by misrepresentations, concealment, false promise or by a fiduciary and have sustained significant damage, you may have a claim and should consult with an experienced fraud litigator: Timothy Norton of Norton & Associates, with 30 years of experience handling fraud-related lawsuits and claims. Fraud claims are often very difficult to prove because there is a necessity to look into the mind of the fraudster and show their fraudulent intent.

However, this evidence is often available in the writings and emails of the person who committed the fraud, and they unwittingly make their fraudulent intent and design clear. An in-depth analysis of these writings and a comprehensive investigation of the electronic record is vital. Often documents are altered, forged, manipulated and even destroyed. These are also signs of fraud.

Timothy Norton of Norton & Associates has extensive experience investigating records, documents and electronic files to determine and prosecute fraud. For a consultation on your potential fraud claim, call Norton & Associates at 310-706-4134.