How To Prove A Texas Actionable Fraud Claim
In Texas, a claim of Actionable Fraud is defined as:
Actionable Fraud is deception practiced in order to induce another to part with property or surrender some legal right. To be actionable, the false representation must be made about a material fact.
It simply means:
One person makes a deceptive comment to get another to give up property or a legal right.
There are 7 elements of the claim:
- Element 1. The defendant made a representation. The defendant made a false statement or claim that misled someone, which is a key part of proving fraud in court.
Facts that might support this element look like:
* The defendant stated that the product was made from 100% organic materials, which influenced the plaintiff’s purchasing decision.
* During a sales presentation, the defendant claimed that the investment would yield a guaranteed return within six months.
* The defendant provided a written report asserting that the property had no structural issues, which the plaintiff relied upon before making a purchase.
* In a conversation, the defendant assured the plaintiff that the service would be completed within a week, leading to the plaintiff’s reliance on that timeline.
* The defendant advertised the vehicle as having never been in an accident, which was a key factor in the plaintiff’s decision to buy it. - Element 2. The representation was made about a material fact. A representation about a material fact in an actionable fraud claim means that someone made a false statement about an important detail that influenced another person’s decision, leading them to take action based on that misleading information.
Facts that might support this element look like:
* The defendant stated that the property had no structural issues, which was a key factor in the plaintiff’s decision to purchase it.
* The defendant claimed that the investment would yield a guaranteed return of 15%, influencing the plaintiff’s financial commitment.
* The defendant represented that the product was FDA-approved, which was crucial for the plaintiff’s trust in its safety and efficacy.
* The defendant assured the plaintiff that the business had been profitable for five consecutive years, impacting the plaintiff’s investment decision.
* The defendant indicated that the vehicle had never been in an accident, which was a significant consideration for the plaintiff’s purchase. - Element 3. The representation was false. “The representation was false” means that a person made a statement or claim that was not true, which misled someone else and is a key part of proving fraud in a legal case.
Facts that might support this element look like:
* The defendant claimed that the product was made from 100% organic materials, but independent testing revealed it contained synthetic chemicals.
* The defendant assured the plaintiff that the investment would yield a guaranteed return, yet the company had a history of financial losses.
* The defendant represented that the property was free of liens, but public records showed multiple outstanding debts against it.
* The defendant stated that the service would be available 24/7, but customers frequently experienced outages and unresponsive support.
* The defendant advertised the vehicle as having never been in an accident, while a vehicle history report indicated it had sustained significant damage. - Element 4. The defendant knew the material fact was false or made it recklessly without any knowledge of its truth and as a positive assertion. The defendant either knew that the information they provided was false or acted carelessly without checking if it was true, while confidently presenting it as a fact, which is a key part of proving a fraud claim.
Facts that might support this element look like:
* The defendant had access to reliable information that contradicted their statement but chose to ignore it.
* The defendant made the assertion in a public forum, despite having previously expressed doubts about its accuracy to colleagues.
* The defendant failed to conduct any due diligence before making the claim, indicating a reckless disregard for the truth.
* The defendant had a history of making similar false claims for personal gain, demonstrating a pattern of deceit.
* The defendant was informed by a credible source that the information was false but continued to assert it as true. - Element 5. The defendant made the representation with the intention that it should be acted upon by the plaintiff. The defendant knowingly made a false statement hoping the plaintiff would rely on it and take action based on that information.
Facts that might support this element look like:
* The defendant explicitly stated that the information provided was accurate and reliable, encouraging the plaintiff to rely on it for making a financial decision.
* The defendant followed up with the plaintiff multiple times to ensure they understood and acted upon the representation made.
* The defendant had prior knowledge of the plaintiff’s reliance on the representation, as they discussed the plaintiff’s plans to act based on the information given.
* The defendant presented the information in a manner that suggested urgency, indicating that the plaintiff should act quickly to benefit from the opportunity.
* The defendant had a vested interest in the plaintiff’s decision, as it would directly impact the defendant’s financial gain or business success. - Element 6. The plaintiff relied on the false material fact. The plaintiff believed a false statement or information provided by the defendant, which influenced their decision or actions, leading them to suffer harm or loss as a result.
Facts that might support this element look like:
* The plaintiff reviewed the defendant’s marketing materials, which contained misleading statements about the product’s effectiveness.
* The plaintiff specifically asked the defendant about the accuracy of the claims made, and the defendant assured them that the information was true.
* The plaintiff made a purchasing decision based on the defendant’s representations, believing them to be factual and reliable.
* The plaintiff incurred financial losses directly attributable to the reliance on the false information provided by the defendant.
* The plaintiff would not have purchased the product if they had known the true nature of the claims made by the defendant. - Element 7. The other party’s reliance on this false material fact contributed to his or her injury. This means that the person who was misled believed the false information and acted on it, which directly led to their harm or loss.
Facts that might support this element look like:
* The other party based their investment decision on the misleading financial projections provided by the defendant.
* The other party incurred significant losses after acting on the false information about the product’s safety.
* The other party was persuaded to enter into a contract due to the defendant’s fraudulent misrepresentation of the property’s value.
* The other party’s reliance on the defendant’s false claims directly led to their financial hardship and subsequent legal action.
* The other party would not have proceeded with the transaction if they had known the truth about the defendant’s deceptive practices.
(See Trenholm v. Ratcliff, 646 SW 2d 927 – Tex: Supreme Court 1983.)
If you’re in court without a lawyer and plan to assert a Claim of Actionable Fraud, having a Personal Practice of Law at Courtroom5 is essential. You’ll need to make informed decisions about what to file at each phase of your case and prepare legal documents that are supported by thorough legal research and a strong analysis of the facts. Equip yourself with the tools and knowledge necessary to navigate your case effectively.
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