fraud in the inducement


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Related to fraud in the inducement: fraud in fact

fraud in the inducement

n. the use of deceit or trick to cause someone to act to his/her disadvantage, such as signing an agreement or deeding away real property. The heart of this type of fraud is misleading the other party as to the facts upon which he/she will base his/her decision to act. Example: "there will be tax advantages to you if you let me take title to your property," or "you don't have to read the rest of the contract--it is just routine legal language" but actually includes a balloon payment. (See: fraud, extrinsic fraud)

References in periodicals archive ?
The plaintiff alleged that the defendant made misrepresentations during their precontractual negotiations, thus suggesting a fraud in the inducement claim.
At least one Illinois case has applied a Florida-style rule, treating negligent misrepresentation cases similar to cases involving fraud in the inducement.
It should also be noted that in Florida a claim of negligent misrepresentation "that resembles fraud in the inducement may support a claim for punitive damages.
See Geri Lynn Mankoff, Note, Florida's Economic Loss Rule: Will It Devour Fraud in the Inducement Claims When Only Economic Losses Are at Stake?
The specific duty encompassed by fraud in the inducement is the duty of the parties entering into the contract to speak honestly regarding negotiated terms.
REVIEW 505, 517-23 (1999), and Geri Lynn Mankoff, Florida's Economic Loss Rule: Will it Devour Fraud in the Inducement Claims When Only Economic Damages Are at Stake?
1996)] seem to have been decided on a `bright line' basis--[HTP]: if a cause of action is pled as fraud in the inducement, the economic loss rule cannot apply; Woodson: if there is a contractual relationship between the parties, fraud in the inducement will never lie.
1993) (holding that "in a fraud in the inducement setting, the intentional fraud which occurs and is completed prior to the formation of the contract can be characterized as `independent' of the contract); Williams Elec.
The statement that virtually any breach of contract action can be pleaded as fraud in the inducement proves the point.
1997), finding a fraud in the inducement claim barred because the alleged promises upon which that claim was premised were addressed in the series of detailed licensing agreements between the parties under which the plaintiffs' hotels were to become part of the Radisson Hotels family.
Weekly D1530 (4th DCA June 28, 2000), holding that the plaintiffs allegation that the defendant developer represented a certain parcel was a "natural preserve," when he knew there was a plan to build a school on that parcel, was sufficient to allege fraud in the inducement.
In all fraud in the inducement cases the alleged fraudulent misrepresentations will either concern the quality and characteristic of the underlying subject matter, because that is the definition of "fraud in the inducement" itself.