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Fraud and Misrepresentation

Phoenix Business Lawyers Fight Fraud and Misrepresentation

Representing plaintiffs and defendants throughout Arizona

Commerce in Arizona and throughout the United States is based on the free and open exchange of goods and services for appropriate compensation. Unfortunately, there are unscrupulous parties who make false claims and use deception to take unfair advantage of others. Fraudulent misrepresentation — a deliberately false statement meant to deceive — victimizes businesses and consumers, whose recourse is generally through the civil court system. At Law Offices of Donald W. Hudspeth P.C. in Phoenix, our business litigation attorneys represent victims of business fraud, aggressively seeking compensation for their losses. We also represent companies accused of misrepresentation in order to help them minimize their economic and reputational losses.

Types of fraudulent misrepresentation in business

Most often, allegations of fraudulent misrepresentation arise in the context of a contract or other business agreement. One party makes a false statement in the course of sealing the deal with a second party. Types of misrepresentation include outright lies, half-truths and omissions of material facts. The second party only learns about the falsehood later, after they have acted in reliance on the contract.

What is to be done? The second party could demand:

  • Restitution and rescission of the contract — The party that committed the fraud may be required to pay the other party for expenses it incurred by acting in reliance on the contract, and the contract is rescinded.
  • Partial performance and damages — The innocent party demands performance of the parts of the contract not affected by the fraud, as well as compensation for losses due to the fraud.
  • Damages — The party that committed the fraud can be made to pay monetary damages for the harm its conduct caused the innocent party.

The innocent party may also claim liquidated damages that are stipulated in the contract. In egregious cases of fraud, a court might award punitive damages.

Elements of a business fraud claim

A business fraud claim requires several elements:

  • A party makes a representation that is false.
  • That party knows the representation is false.
  • The party making the representation does so to induce the innocent party to rely on it in entering an agreement.
  • The innocent party relies on the truthfulness of the misrepresentation and would not otherwise have entered into the agreement.
  • The innocent party suffers measurable harm as a direct result of the fraudulent statement.

Some of these elements can be difficult to prove. For example, a party can make a false statement not knowing it is false. Without deliberate intent, the misrepresentation may be negligent (if the speaker should have known the statement was false) or innocent (where the speaker had reasonable grounds to believe the statement was true). In cases of innocent misrepresentation, a victim’s only remedy may be rescission of the contract without damages. To build a strong case to recover your losses, you should consult an experienced business litigation attorney at our firm as soon as you become aware of a false statement that you relied upon to your economic detriment.

Contact a Phoenix business litigator regarding a fraudulent misrepresentation claim

Law Offices of Donald W. Hudspeth P.C. in Phoenix provides determined representation for plaintiffs and defendants in cases alleging fraudulent misrepresentation. Call our talented and experienced business litigation attorneys at 866-696-2033 or contact us online to schedule a consultation. Our firm is easily accessed either by light rail or car, with plenty of available parking.

Donald W. Hudspeth Attorney Photo
Donald W. Hudspeth
Principal Attorney

Attorney Donald W. Hudspeth has more than twenty years’ experience practicing corporate and business law. Before attending law school, Mr. Hudspeth held a stock brokers license at the age of 21 and owned his own business at the age of 23. He was a business law professor at Arizona State University, West Campus, and has conducted classes and seminars for a number of higher institutions and organizations. Mr. Hudspeth has published two books on law and is the founder of the radio programs Law on the Edge and Law Talk.

Mark S. Hamilton Attorney Photo
Mark S. Hamilton

About Attorney Mark S. Hamilton has experience handling all aspects of civil and commercial litigation in federal, state, and tribal courts at the trial and appellate levels. Practice Areas Business litigation Commercial litigation Education University Of Hawaii Wm. S. Richardson School Of Law, Juris Doctor - 2002 University Of Hawaii, Master Of Arts in Asian…

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Our firm now offers a scholarship program for ASU first and second year law students.

The scholarship is awarded to students for academic merit with an interest in business and business law. Candidates may have majored in fields other than business, have taken a break between college and law school, or have had exceptional life experiences.

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  • "I would recommend Mr. Hudspeth unequivocally. Not only is he an outstanding business attorney, he also provided me with access to a divorce attorney. Thanks to his skill, and resources available outside the Phoenix law family, I was successful in challenging a “family law” mediation that was particularly and grossly unfair." - Chandler, Arizona Private Individual

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