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(295.) Fraud in the inducement occurs when a party is induced to enter a contract "as when a seller misrepresents the quality of goods." E.
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.
In La Pesca, the court implied that an understanding of the "interwoven" limitation of Huron, "merely requires an appreciation of the distinction between fraud in the inducement and fraud in the performance of a contract." 704 So.
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.
The Huron limitation suggests a misunderstanding of the tort of 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.
Returning to the Hotels of Key Largo language, and employing some of Judge Griffin's rationale, the district court reiterated that fraud in the inducement is precontract fraudulent conduct which undermines one party's ability to negotiate and make informed decisions, so that the factual inquiries supporting the fraud are distinguishable from those supporting a subsequent breach of contract claim.
a) Any promise, warranty, obligation or issue that is specifically and directly addressed in and covered by the contract cannot form the basis of a fraud in the inducement claim.
However, since several courts view this as an issue of proof, and several have accepted this type of fraud in the inducement claim, it appears it can still be brought so long as the plaintiff can satisfy the burden of proving the defendant's intent not to perform at the time the representation was made.