Fraudulent Misrepresentation

In one sentence

A deliberate false statement made with intent to deceive and cause harm.

Plain English

Fraudulent misrepresentation is a step beyond ordinary misrepresentation: the speaker knowingly lies, intends to deceive, and wants the other person to rely on the lie. The victim must actually rely on the false statement and suffer harm. Fraudulent misrepresentation can result in contract cancellation plus punitive damages (extra money meant to punish the wrongdoer).

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Example

An investment advisor tells a client that a particular stock is "guaranteed to double in value" when the advisor knows the company is on the verge of bankruptcy and has hidden this information. The client invests $100,000 based on this lie. The client can sue for fraudulent misrepresentation and recover not only the lost money but also punitive damages to punish the advisor's dishonesty.

Used in a sentence

“The court awarded punitive damages because the defendant's fraudulent misrepresentation was deliberate and malicious.”

Related terms

Misrepresentation

A false statement of fact made to induce someone into a contract.

Punitive Damages

Extra money awarded to punish wrongful conduct and deter future misconduct.

Damages Calculation

The process of determining how much money a harmed party should receive for a breach.

Implied Warranty

An unspoken legal guarantee that a product is fit for its ordinary purpose and of acceptable quality.

Mistake of Fact

A misunderstanding about something that actually exists or happened, rather than about the law itself.

Offer

A proposal to enter into a binding agreement on specific terms.

Acceptance

Agreeing to the exact terms of an offer, creating a binding contract.

Consideration

Something of value exchanged by each party to make a contract binding.

This page is a plain-English reference and is not legal advice. Laws vary by jurisdiction and change over time. For specific situations consult a licensed attorney.