The assorted ways a victim can be defrauded are as limitless as the boundary of human ingenuity. But under Golden State law, unlawful actions are generally characterized as civil "fraud" only under one of the followers legal theories:
1. Deliberate Misrepresentation. Probably the most common type of fraud is a false statement. But not every false statement is fraudulent. The elements of a claim for deliberate deceit are:
a. An intentionally or recklessly false statement of fact. Not every false statement is a false statement of "fact." Statements of sentiment generally are not actionable. Gross Sales talk, or "puffing" ("This is the best location in the county!"), is generally not actionable. However, if the suspect claims to be an expert or there are other grounds to anticipate that the victim would trust upon the defendant's sentiment as a statement of "fact," an sentiment may be treated by the tribunal as a statement of fact. Also, a statement demand not be made directly to the victim. For instance, if the suspect made the false statement to a 3rd individual with the outlook that the statement would be repeated to the victim, the victim may have got a valid claim for deceitful misrepresentation.
b. Intention to defraud. If a mental representation of fact was intentionally false and a stuff portion of the dealing (e.g., "this house makes not have got implosion therapy problems"), it is likely the false promise was made with the purpose to victimize the victim.
c. Reasonable trust upon the false statement. The victim must have got got actually relied upon the statement to change his or her place (e.g., the victim would not have purchased the house if he or she knew the truth). The false statement demand not be the lone ground the victim changed his or her position, but it must be at least portion of the reason. Also, the victim's trust on the false statement must be reasonable. If the victim knew or should have got known the statement was false, the victim did not reasonably rely. The edification of the victim will play A function in determining whether his or her trust on the statement was reasonable; e.g., a sophisticated existent estate investor's trust on a mental representation about the qualities of a house may not be sensible while an unsophisticated buyer's trust may be. Even an unsophisticated victim, however, "may not set religion in mental representations which are preposterous, or which are shown by facts within his observation to be so patently and obviously false that he must have got closed his eyes to avoid find of the truth." Pete Seeger v. Odell (1941) 18 Cal. 2d 409.
d. Resulting in damages. There must be mensurable amends that were caused by the fraud. It is not adequate that the victim was told a prevarication (e.g., "A celebrated film star once slept in this house"); the victim must also be able to turn out some type of harm resulted from the lie.
2. Negligent Misrepresentation. A claim for negligent deceit is generally the same as a claim for deliberate misrepresentation, except the victim must only turn out the suspect did not have got "a sensible basis" to believe its statement of fact was true (as opposing to proving the suspect knew its statement was false). If the defendant's false statement was both honestly made and based upon sensible grounds, however, there is no claim. Punitive amends are not available for negligent misrepresentations.
3. Concealment. A claim for fraud may also originate if the suspect concealed or failed to let on a stuff fact during a transaction, causing harm to the victim. The elements of a claim for deceitful privacy are:
a. The suspect failed to let on or concealed a stuff fact with an purpose to victimize the victim.
b. The suspect had a duty to disclose. There is not always a duty to let on facts during a transaction. If there is a duty, it generally originates in one of four different circumstances: (i) The suspect is in a "fiduciary relationship" (such as being a partner) with the victim; or (ii) The suspect took stairway to conceal of import information from the victim (as opposing to simply failing to state the victim); or (iii) The suspect disclosed some information to the victim, but the disclosed information is deceptive unless more than information is given; or (iv) The suspect is aware of cardinal information and cognizes the victim is improbable to detect that information. In addition, Golden State laws may make a duty to let on in certain transactions. For example, Sellers of residential place in Golden State generally are required to do written revelations about the status of the house.
c. The victim must have got got been unaware of the fact and would not have acted as he or she did if he or she knew of the fact.
d. The victim sustained amends as a consequence of the concealment.
4. False Promise. A claim of fraud may originate if a suspect entered into a contract and made promises that it never intended to perform. The elements of a false promise claim are:
a. The suspect made a promise.
b. The promise was of import to the transaction.
c. At the clip he or she made the promise, the suspect did not mean to execute it.
d. The suspect intended the victim to trust upon the promise.
e. The victim reasonably relied upon the promise.
f. The suspect did not execute the promise.
g. The victim was harmed as a consequence of suspect not carrying out his or her promise.
h. The victim's trust on the defendant's promise was a significant factor in causing the victim's harm.
It is of import to understand that a broken promise, alone, is not a sufficient footing for a fraud claim. More than a mere broken promise is required. The victim must also turn out that the suspect did not mean to execute the promise at the clip the promise was made. In practice, it is usually hard to state the difference between a broken promise and a promise made without an purpose to perform. Courts generally look for circumstantial grounds to back up a false promise claim (as opposing to a broken promise claim), such as as the suspect broke its promise immediately after making it.
Characterization of a claim as fraud have many advantages to a victim; primarily, the victim may be able to retrieve punitory amends in improver to existent damages. Also, the measurement of amends is generally more than than progressive under fraud and other "tort" theories, allowing victims a more complete recovery. But even if a unlawful action makes not fall under the definition of "fraud," it still may take to a valid legal claim. For instance, a broken promise - while not necessarily fraudulently - may still represent a valid breach of contract claim. While punitory amends and emotional hurt amends are generally not available for breach of contract in California, the victim still should be able to retrieve his or her pecuniary damages.
This article represents general information only and should not be relied upon as legal advice.