To have a successful business, you need some sort of stability. You need steady supply chains and reliable employees, as well marketing strategies that are consistent and in-line with your standards. These things might seem like they fall into place on their own, but the truth of the matter is that contracts often play vital role in ensuring that your business operations flourish.
Yet, business can and do fail all the time in the business world. When that happens, legal action might be justified if breach was caused by a party’s failure to abide by the terms of the agreement. But there might be instances where a once attractive contract suddenly doesn’t look so good. In these instances, is there a way for you to back out of the contract or be made whole again?
A look at fraudulent misrepresentation
There are ways to escape a contract and be restored to the position you were in before signing off on the agreement, as well as recover damages caused by breach. One way is by showing fraudulent misrepresentation. Contracts should be build on trust, honesty, and transparency. Yet, all too often lies and misleading representations are made as a way to coax parties into an agreement. When this happens, fraudulent misrepresentation may have occurred.
In order to successfully show fraudulent misrepresentation, though, you have to prove a number of things. Each of the following should exist before pursuing this legal avenue:
- An actual representation of fact was made
- The representation was either false or extremely misleading
- The party that made the representation had knowledge of the falsity of the representation or they made it with reckless disregard for its potential falsity
- The false representation was made in hopes that the other party would rely on it
- The other party relies on that misrepresentation to its detriment
- Some sort of financial harm was caused by that reliance
Be sure to know how to build your claim
There’s a lot to unpack in a fraudulent misrepresentation case. You have to discover the truth of the representation, show intent, and demonstrate how you only signed the agreement because of that representation and how it hurt you. To prove each of these elements you’re going to need strong legal arguments supported by convincing evidence. While that might sound daunting, attorneys who are experienced in business litigation stand ready to help you fight to protect your and your business’s interests.
