Fraud

The word “fraud” has a somewhat limited legal definition, but is also sometimes used generically to refer to many forms of  misrepresentation and concealment.  In California, a “fraud” case requires:

(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity; (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.

Constructive Fraud

Proving knowledge of falsity can be the most difficult aspect of a fraud case.  However, in many situations, a case can be made for “constructive fraud” which does NOT require proof that a speaker had knowledge of the falsity of his or her misrepresentation.  The most common such situations are agency relationships (real estate, insurance, employee, etc.) and other relationships giving rise to fiduciary duties on the part of the speaker.

Non-Disclosure Agreement

Even if no fiduciary relationship exists, “fraud” can sometimes be replaced by California statutory duties requiring disclosure.  Real estate sellers and sellers’ agents are among those who are subject to these duties.

California common law also provides other substitutes for fraud.  A claim for non-disclosure may arise if: (1) the speaker makes representations but does not disclose facts which materially qualify the facts disclosed, or which render his disclosure likely to mislead; (2) the facts are known or accessible only to the speaker and the speaker knows they are not known to or reasonably discoverable by the listener;  or (3) the speaker actively conceals discovery from the listener.

We have had success pursuing and defending many such cases, including in real estate, business sale, and securities transactions, among others.  If you are confronted with such a case, contact us to discuss your options.