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What is fraudulent misrepresentation in the business world?

Fraudulent misrepresentation is not the same as breach of contract. A breach of contract is when all parties agree to certain terms of a contract, and then one of the parties does not follow through on their end of the deal.

Where fraudulent misrepresentation differs is that the contract is based on a false premise. Something in the contract terms might be misleading, false or inaccurate. Another type of fraudulent misrepresentation could even be a gesture or a verbal statement that misled parties to sign an agreement.

If you have signed a contract and believe it is based on inaccurate facts or was misrepresented, you will want to be released from it and compensated if you have experienced any damages. Getting out of the contract may take a good business litigation attorney.

Your attorney must prove that first, a representation was made. A representation is "any action or conduct" that can be considered a statement of fact. He or she must also prove the representation was false and that when it was made, the person making the representation either knew it to be false or was not sure it was true.

It must also be proven that the party making the representation intended for you to rely on it, and you in fact did. You must also have suffered damages as a result of the false misrepresentation.

In cases of fraudulent misrepresentation, rescission of the contract and request for damages are the most common remedy. Because of the fraudulent misrepresentation, the contract is rendered as voidable, which is another possible remedy. Your attorney can discuss your legal options with you.

Source: FindLaw, "Fraudulent Misrepresentation," accessed Feb. 16, 2018

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