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California Fraud and Misrepresentation Laws

California Fraud misrepresentation law

California law allows persons to recover damages for intentional fraud as well as negligent misrepresentations if certain elements are sufficiently plead and proved. There are specific elements that a party is required to prove in order to successfully recover damages suffered due to the fraud or misrepresentation.

What is Fraud?

Fraud is using deceit or dishonest means for the purpose of depriving another of money, property or a legal right.

What are the Different Types of Fraud?

Intentional Fraud/ Deceit occurs when the defrauder uses deceit or false important facts to convince the victim to rely on the false facts.  Then the victim reasonably relied on and was harmed by the deceit.

Promissory Fraud occurs when the defrauded makes a promise that is important to the transaction that he or she never intends to, nor never performs, in order to induce the victim to rely victim rely on the promise.  Then the victim must reasonably rely on and be harmed by the false promise. “An action for promissory fraud may lie where a defendant fraudulently induces the plaintiff to enter into a contract.” (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 973-974; Tenzer v. Superscope, Inc. (1985) 39 Cal.3d 18, 30.)

Concealment Fraud occurs when there is a fiduciary or other relationship between the parties where there is a duty of full disclosure. The concealing person, with an intention to deceive, does not disclose important facts that the concealing person knows but the victim does not and could not know. Further, the victim reasonably relied on and was harmed by the concealment.

Constructive Fraud or Negligent Misrepresentation occurs when the perpetrator misrepresents to the victim that an important false fact is true. However, the defrauder may have honestly believed that the false representation is true.  Yet, the defrauder had no reasonable grounds for believing the representation was true when he or she made it; and he or she intends that victim rely on the representation.  The victim must reasonably rely on and be harmed by the false representation.

How to Prove Intentional Fraud in California?

In proving intentional fraud in California it requires all of the following elements be proved:

  • misrepresentation (false representation, concealment, or nondisclosure);
  • knowledge of falsity (or ‘scienter’);
  • intent to defraud, i.e., to induce reliance;
  • justifiable reliance; and
  • resulting damage.”

“An action for promissory fraud may lie where a defendant fraudulently induces the plaintiff to enter into a contract.” (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 973-974; Tenzer v. Superscope, Inc. (1985) 39 Cal.3d 18, 30.)

How to Prove Negligent Misrepresentation in California?

Negligent misrepresentation often times referred to as constructive fraud requires that all of the following elements be proved:

  • a misrepresentation of a past or existing material fact;
  • without reasonable grounds for believing it to be true;
  • with intent to induce another’s reliance on the fact misrepresented;
  • ignorance of the truth and justifiable reliance thereon by the party to whom the misrepresentation was directed; and
  • damages

Hire the Right Misrepresentation and Fraud Attorney

Our misrepresentation and fraud attorney in Los Angeles has experience in complex fraud and misrepresentation cases. If you are an individual victimized by a corporation’s commercial deception we welcome you to call to us at (310) 943-1171. Our proven litigators and investigators at KAASS Law will help you with your corporate fraud case.

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