A fraud claim generally requires a false representation of material fact, knowledge of its falsity or reckless disregard, intent to induce reliance, justifiable reliance, and resulting damages.
Fraud must be pleaded with particularity, requiring the who, what, when, where, and how of the alleged misrepresentation.
Alternative Names:
Fraudulent Misrepresentation, Intentional Misrepresentation
Why it Matters?
Fraud is pleaded in commercial cases to escape contractual limitations, since limitation of liability clauses, the economic loss doctrine, and the parol evidence rule often do not bar fraud claims. It also opens punitive damages. Defense strategy focuses on the particularity requirement at the pleading stage and on justifiable reliance, which is difficult to establish where the plaintiff is a sophisticated party who conducted its own diligence.
Frequently Confused with
Related terms
Frequently asked questions
Why do commercial plaintiffs plead fraud?
What does pleading with particularity require?
