What is Fraud?
As we head into another trial related to fraud in the sale of a business, we thought we would update on fraud in California.
Fraud comes up in both criminal and civil cases. In criminal cases, the District Attorney’s office will prosecute the defendant, and he or she may be subject to fines and/or imprisonment. In civil cases, the plaintiff (or the person on whom the fraud was committed) will pursue the action. If the plaintiff wins, the defendant may have to pay him or her money as damages. In California, civil fraud comes up in two (2) contexts: torts and contracts. “Tort” is just a fancy word for a wrongful act. However, torts do not include breaches of contract. As a result, there are different rules for dealing with fraud in torts and contracts cases. Many courts use the terms “fraud” and “deceit” interchangeably, so don’t be thrown off. The idea behind both is that if a person intentionally tricks you into doing something you otherwise would not have done, he or she should be liable. For torts, California uses the term “deceit” rather than fraud. The California Civil Code states that deceit can mean many things, including: (1) a knowingly false suggestion; (2) an assertion with no reasonable grounds for believing it; (3) a suppression of fact, which must be disclosed; (4) a misleading fact; or (5) a promise without any intention of performing it. For contracts, the California Civil Code identifies two (2) types of fraud: actual and constructive. Actual fraud may occur through: (1) a knowingly false suggestion; (2) a positive assertion with no information to warrant it; (3) a knowing suppression of fact; (4) a promise without any intention of performing it; or (5) any other act fitted to deceive. On the other hand, constructive fraud means: (1) any breach of duty in which one person gains an advantage over another by misleading him; or (2) any act or omission that the law specifically states is fraudulent. http://www.bc-llp.com/Business-Litigation/Fraud-Contract-Disputes.html If you want to learn more about fraud, the experienced attorneys at Brown & Charbonneau, LLP are here to help. Contact us today at (888) 809-1235 or visit our website at www.bc-llp.com.