Fraud in Inducement
Fraud in inducement, also known as fraudulent inducement, occurs when one person induces another person to act in their favor through misleading information that is not within the contract or other legally-enforceable document. It most often applies in the area of contract law, where one party gets another to agree to something through trickery or misinformation. An example would be if someone posing as a professional encourages you to sign a contract for their services while they are not actually in that profession.
A closely-related type of fraud, fraud in factum, occurs where the contract itself contains fraudulent information, such as they type of service or good you are purchasing.
Unsophisticated small businesses and private citizens unfamiliar with those they are contracting with are especially vulnerable to fraudulent inducement. It is easy to imagine a private citizen being fooled by a contractor, or a small subcontractor being fooled by someone posing as a supplier.
Signing contracts with those posing as someone they are not can create significant headaches. Sometimes the obligation you expected them to fulfill is part of a larger obligation that you owe to someone else. This can get messy.
If you believe you have signed a contract because of the fraudulent representations of the other party, you need an experienced attorney to help you enforce your rights. As you will see, fraud claims are rather technical and can be difficult to litigate. You do not want to do this on your own.
Attorney Rob Cohen has vast experience representing clients tricked by the misrepresentations of those with which they enter into agreements. If you have suffered because of the tricks of another party, contact him today for a free consultation.
Fraud in Inducement in Illinois
Fraud in inducement is a common law cause of action in Illinois. This means that the courts, rather than the legislature, created the protections.
Under the common law, a plaintiff will make his obligation under a contract voidable because of fraud in inducement if he or she can prove three things.
First, the plaintiff must prove that there was a material fact that was represented to the plaintiff by the defendant to induce the party to act.
Second, the plaintiff must prove both that the defendant knew that the statement was false and that the plaintiff was unaware of its falsity.
Third, the plaintiff must prove that he or she relied on this fact in agreeing to the deal that was to his or her detriment.
If the plaintiff proves all three of these requirements, then their obligation under the contract becomes voidable. This does not mean the contract automatically goes away. Rather, it means that the plaintiff is no longer required to perform their part of the obligation if they do not want to.
Generally, this means that they no longer have to pay what they would have owed, but other obligations can also be voided at their discretion.
Proving these three requirements can be somewhat difficult, which is where an experienced attorney can be invaluable. Fraud cases often become he-said, she-said affairs. Protecting your rights often means an incredible amount of investigation into the defendant’s history. This is not something you want to do on your own.
If you believe that you have been fraudulently induced into a contract, you have rights. Contact Attorney Rob Cohen, who has years of experience aiding those that have been induced fraudulently, today for a free consultation.