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What’s fraudulent misrepresentation in a business deal?

In any business deal, all the involved parties are expected to look out for themselves, but that doesn’t mean that a party can resort to trickery just to make a deal.

A fraudulent misrepresentation is a type of deliberate untruth that one party uses to lure another party into a deal. Fraudulent misrepresentation can happen when one party purposefully lies to the other, omits information that he or she should have disclosed or recklessly states something as a fact even though he or she has no way of knowing the truth of the matter.

If that fraudulent misrepresentation was about something material that would ultimately induce you to make an agreement, you may be entitled to rescind the contract. If that’s not possible or doing so won’t allow you to recover all your losses, you may be able to file a lawsuit for damages.

Often, fraudulent misrepresentation claims happen when one party to a deal gets liberal with their interpretation of the truth to deceive the other party, using ambiguous language and trickery.

For example, imagine that you spot a vintage 1977 Pontiac Trans Am for sale on a used car lot. Intrigued, you ask about it, and the owner tells you that, “It’s the same car that Burt Reynolds drove in the movies!” Excited to own a piece of cinematic history, you rely on the salesman’s word and happily purchase the car, only to find out later that it has no connection to the movies or Burt Reynolds.

The car salesman then tells you that he was merely suggesting that the car was the same year and model that Burt Reynold’s drove in the movies, not the actual car. If the salesman was unwilling to take back the car and return your money, you may have to look into a lawsuit in order to resolve the matter.

Most business dealings involve bigger stakes than a car. If you believe you’re the victim of fraudulent misrepresentation, an attorney can help you assess your case and explain all your options for recovery.