The claim requires a material misrepresentation of existing fact, knowledge of falsity, intent to induce reliance, justifiable reliance, and damages. Statements of opinion and future intent generally do not suffice.
Remedies include rescission and damages.
Alternative Names:
Fraud in the Inducement, Inducement Fraud
Why it Matters?
Integration clauses and non-reliance provisions are the primary defenses, since a party that agreed it relied on no representations outside the contract has undermined the reliance element. Enforcement varies, with some states holding that a specific non-reliance clause bars the claim while others refuse to let a contract insulate fraud. The distinction between fraudulent inducement and fraudulent performance also determines whether the economic loss rule applies.
Frequently Confused with
Related terms
Frequently asked questions
Do non-reliance clauses bar the claim?
Do statements of future intent qualify?
