What Are the Six Conditions of Fraudulent Misrepresentation?

What is Fraudulent Misrepresentation?

Under Pennsylvania Law, a business and/or its agents can be liable for fraudulent misrepresentation if a misrepresentation of fact or law is fraudulently made for the purpose of inducing another to act or refrain from acting.

Fraudulent misrepresentation is the most serious form of misrepresentation and, therefore, the most difficult to prove. In business disputes, fraudulent misrepresentation can lead to major financial losses, and for consumers, it can mean being cheated out of receiving a good or service they have otherwise been promised.

Woman sad over finances

How to Prove Fraudulent Misrepresentation

Proving misrepresentation involves showing that a false statement was made, the person making it knew it was untrue, it was intended to make someone act on it, and it resulted in harm or loss because it was relied upon. Legal expertise is often required to effectively establish these elements.

To prove fraudulent misrepresentation has occurred, the following six conditions must be met:

1. A representation was made

Obviously, a representation must be made in a case alleging fraudulent misrepresentation. The representation must be a factual claim. Mere puffery does not count as a representation. So a factual representation could include a car dealer saying a certain car gets 30 miles per gallon, but would not include a more subjective claim, such as "This car will change your life!"

2. The claim was false

Furthermore, the representation that was made must be shown to be false. So if, returning to the above example, a car that is advertised as getting 30 miles per gallon actually only gets 25 miles per gallon, evidence would need to be provided of the car's actual fuel efficiency.

3. The claim was known to be false

The person or business making the claim also must have known the claim was false or should have known the claim was false. Furthermore, the party making the claim cannot deliberately avoid finding out the truth of a claim and then claim ignorance because he or she failed to verify the claim.

4. The plaintiff relied on the information

It is not enough that a false claim was made by the defendant in order to prove fraudulent misrepresentation. Furthermore, the plaintiff in the case must show that the false claim was also an important factor in his or her decision to complete the transaction. Again, the consumer alleging fraudulent misrepresentation against a car dealer would have to show that the car's gas mileage was a factor in his or her decision to purchase the vehicle.

5. Made with the intention of influencing the plaintiff

Likewise, the claim must also have been made with the intention of convincing the plaintiff to take a certain course of action. In cases involving businesses, such false claims are often made with the intention of getting people to agree to a deal they would not have otherwise agreed to, such as overvaluing a business that is up for sale.

6. The plaintiff suffered a material loss

Finally, the misrepresentation must have led to a loss for the plaintiff. Proving that a loss occurred is very important, especially since it allows the plaintiff to claim damages to compensate him or her for that loss.

Skilled Representation for Consumers & Businesses in Philadelphia

If you have been the victim of possible fraudulent misrepresentation, whether you are a consumer or a business owner, then you need an attorney who has the experience and dedication to fight for your case. The legal team at Weisberg Law has handled many cases involving misrepresentation. Contact them today at (610) 550-8042 to find out how they may be able to put that experience to work for you.

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