When a Breach of Contract Becomes Fraud: Legally Proving Contract Fraud

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Proving a Claim for Contract Fraud: A Comprehensive Guide

Whether in real estate, foreign or direct investments, or commercial loans, contracts serve as legally binding agreements between parties that sign them. Breach of contract is when one party fails to comply with the terms and conditions set in the agreement. Contract fraud is a more specific type of breach that involves the intentional misrepresentation of facts or deceitful actions by one party. Knowing the steps required to prove a claim for contract fraud and where to find the best contract lawyer in the process makes all the difference in getting a successful outcome.

Contract fraud is a serious matter that allows parties to seek rightful remedies. At RS Law Group, we have helped many clients right wrongs and recover damages by being aggressive and using our firmu2019s 10+ years of winning experience. Feel free to call us at 215-717-2200or email us at co*****@********up.comfor a free consultation if you are dealing with a case of contract fraud.

Contract Fraud vs Breach of in Pennsylvania

When a party to the contract signed provides false or misleading information that persuades the other party to enter the agreement or when a party intentionally omits or fails to disclose material facts that result in false or misleading statements, it is contract fraud. There is a major difference between a simple contract breach and contract fraud, as the latter involves intentional deceitful actions and is rooted in tort law.

Fraud in the Inducement

Fraud in the inducement occurs when one side gives false information that influences the other party to enter the contract in the first place. This type of fraud focuses on the misrepresentation of facts that lead to the formation of the contract. For example, a real estate agent might falsely claim that a commercial property in Philadelphia has no pending legal issues to persuade a potential buyer to enter the agreement. 

Fraud in the Factum

Fraud in the factum, otherwise known as fraud in the execution, is when a party enters a contract without fully understanding the obligations, duties, and risks associated with the transaction. This type of fraud focuses on the actual signing of the contract. An example would be a person tricked into signing a deed to their Pennsylvania home, believing they were signing a tax waiver.

Elements of Contract Fraud

To successfully prove a claim for contract fraud, a strong basis for the following must be made:

  • A representation was made by a party.

  • The representation was false or misleading.

  • The party making the representation knew it was false or misleading at the time of making the statement.

  • The party making the false representation intended for the victim to rely on the false information.

  • The victim relied on fraudulent misrepresentation.

  • The victim actually sustained harm or damages due to their reliance on the misrepresentation.

Role of a Lawyer in Proving Contract Fraud

Hiring the best lawyer to prove contract fraud should not be up for debate. The top law firm in Philadelphia that has handled contract issues many times will gather evidence, build a strong case, and protect your rights throughout the legal process. Always start with a free consultation. A confident firm should have no problem giving you time to hear you out.

Gathering Evidence

To prove contract fraud, strong evidence will properly support each element of the claim. Your attorney will help gather relevant documents, such as emails, contracts, and financial records, to establish the facts of the case. They may also work with domain experts, such as forensic accountants or real estate appraisers. They might even bring in the top real estate attorneys or contract lawyers within their own firm to analyze the evidence and provide guidance.

Filing the Lawsuit

Once your attorney has gathered the evidence and built the strongest possible case for you, they will file a lawsuit on your behalf. The lawsuit will include a detailed description of the fraudulent actions, the harm or damages sustained, and the remedies sought.The suit must be filed within the statute of limitations set by Pennsylvania law to ensure the case can proceed.

Potential Remedies for Contract Fraud

If your contract fraud claim is successful, different kinds of remedies may be available:

  • Compensatory Damages – Monetary damages awarded to the victim to compensate for any financial losses suffered due to the contract fraud.

  • Punitive Damages – Damages awarded to punish the wrongdoer for their intentional and deceitful actions. Punitive damages are not typically applicable in simple breaches of contract.

  • Rescission – The contract is now canceled, and the parties are returned to their pre-contract positions.

  • Reformation – The contract is modified to reflect the true intentions of the parties.

  • Specific Performance – The breaching party is ordered to fulfill their contractual obligations.

  • Injunction – A court order preventing the breaching party from continuing their fraudulent actions.

Finding the Best Law Firm in Philadelphia for Your Contract Dispute Case

Always start with a free consultation. A confident firm should have no problem giving you time to hear you out.

RS Law Group, has helped many clients right wrongs and recover damages by being aggressive and using our firm’s 10+ years of winning experience. Feel free to call us at 215-717-2200or email us at co*****@********up.comfor a free consultation if you are dealing with a case of contract fraud.

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