Fraud/Misrepresentation/Nondisclosure - Contract Defense
- Misrepresentation (fraud in the inducement) - A misrepresentation is a statement at the time of contracting that is not true. It can be intentional (fraudulent) or accidental. To assert this defense, party must show:
- 1. A misrepresentation of a PRESENT FACT (not opinion);
- 2. That is material OR fraudulent(intentional); AND
- 3. That is made under circumstances in which it is justifiable to RELY on the representation.
- Fraud in the Execution - Fraud in the execution is when you trick someone into signing something that she doesn’t even know is a K. (see different from above)
- Nondisclosure - The other party doesn’t learn the truth about something, but now you just remain quiet. Normally, you need not tell the other side about all material facts related to the deal. BUT watch out for a special (fiduciary duty) relationship or active CONCEALMENT.