In Florida, the law provides certain protections when someone makes a fraudulent statement that causes you to enter into a contract. Fraud in the Inducement happens when someone purposely tells you a lie that causes you to agree to and sign a contract. When this happens, it obviously would not be fair to force you to stick to the contract. If this has happened to you, you may have a cause of action for Fraud in the Inducement.
As individuals entering into contracts, it is necessary to rely in great part on what others tell us. We should not have to conduct an independent investigation of every statement or claim someone tells us before entering into a contract. That would be overly burdensome, and the law agrees.
Bring a Claim for Fraud in the Inducement
To bring a claim for Fraud in the Inducement (aka Fraudulent Inducement) in Florida, a Plaintiff must show that:
- The Defendant made a misrepresentation (a false statement) of a material fact;
- Defendant knew or should have known that the statement was false;
- The Defendant intended the representation to induce the Plaintiff to rely and act on it; and
- There was resulting injury to the Plaintiff acting in justifiable reliance on the representation.
Fraudulent inducement is a separate and distinct claim from breach of contract, because to have a breach of contract, there must first be an actual contract.
Under a claim for fraudulent inducement the plaintiff alleges that the defendant made a pre-contract false representation that caused the plaintiff to enter the contract. In this situation, the contract is a fraud such that no claims may be made under it. When a contract was entered into based on fraud, it is void such that there is no actual contract. That is why cancellation (or rescission) is the main remedy for a claim of Fraud in the Inducement.