How To Prove A Texas Fraudulent Misrepresentation Claim
In Texas, a claim of Fraudulent Misrepresentation is defined as:
Fraudulent misrepresentation refers to the act of making false statements or misrepresentations with the intent to deceive and induce another party to act in a way that results in harm or loss.
It simply means:
When one party purposely uses deception as a way of persuading another party to do something.
There are 6 elements of the claim:
- Element 1. The defendant made a material representation. The defendant provided false information that was important to the situation, which led the other party to make decisions based on that misleading claim.
Facts that might support this element look like:
* The defendant stated that the property was free of any liens or encumbrances, which was later proven to be false.
* The defendant provided a written appraisal claiming the property was worth $500,000, despite its actual market value being only $350,000.
* The defendant assured the plaintiff that the roof was recently replaced, but inspection revealed it was over 20 years old and in disrepair.
* The defendant claimed to have extensive experience in real estate transactions, but had only completed one prior sale.
* The defendant represented that all appliances in the home were in working condition, yet several were found to be non-functional upon inspection. - Element 2. The representation was false. “The representation was false” means that the information or statement made by one party was not true, which misled the other party and is a key part of proving that fraud occurred in a legal claim.
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 additives.
* The defendant stated that the property had no structural issues, yet a licensed inspector found significant damage that required extensive repairs.
* The defendant advertised the vehicle as having never been in an accident, while the vehicle history report showed multiple prior collisions.
* The defendant assured the buyer that the investment would yield a guaranteed return, despite having no basis for such a claim.
* The defendant represented that the software was fully functional, but users experienced frequent crashes and data loss upon installation. - Element 3. The defendant knew the representation was false when he or she made it, or the defendant made it recklessly without any knowledge of the truth and as a positive assertion. The defendant either knew the statement was untrue when they made it or made it carelessly without checking the facts, treating it as if it were true.
Facts that might support this element look like:
* The defendant had previously been informed by a reliable source that the information he provided was inaccurate.
* The defendant made the representation despite having access to documents that contradicted his claims.
* The defendant had a history of making similar false representations in prior transactions.
* The defendant’s demeanor during the conversation suggested he was aware of the falsehood of his statements.
* The defendant failed to conduct any due diligence before making the assertion, indicating a reckless disregard for the truth. - Element 4. The defendant made the representation with the intention that it should be acted upon. The defendant knowingly made a false statement hoping that the other person would rely on it and take action based on that misleading 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 their decision-making.
* The defendant followed up with the plaintiff multiple times to ensure they were acting on the information given.
* The defendant had a history of making similar representations to induce others to act in their favor.
* The defendant stood to gain financially from the plaintiff’s reliance on the misrepresentation.
* The defendant crafted the representation to align with the plaintiff’s needs, indicating a clear intention for it to be acted upon. - Element 5. The representation was in fact justifiably relied upon. The statement made by one party was believable enough that the other party reasonably trusted it, leading them to make decisions based on that information, which is a key part of proving a fraudulent misrepresentation claim.
Facts that might support this element look like:
* The plaintiff conducted thorough research and found the defendant’s claims to be consistent with industry standards.
* The plaintiff sought advice from a trusted advisor who confirmed the validity of the defendant’s representations.
* The plaintiff had no prior knowledge that would have caused them to doubt the truthfulness of the defendant’s statements.
* The plaintiff made a significant financial investment based on the defendant’s assurances, demonstrating their reliance on the information provided.
* The defendant’s representations were made in a formal setting, lending credibility and weight to the claims made. - Element 6. The plaintiff was damaged or harmed as a result of the representation. The plaintiff must show that they suffered a loss or injury because they believed the false information provided by the other party, which led them to make decisions they otherwise wouldn’t have made.
Facts that might support this element look like:
* The plaintiff relied on the defendant’s false representation when making a significant financial investment.
* As a direct result of the misrepresentation, the plaintiff incurred substantial financial losses.
* The plaintiff experienced emotional distress due to the unexpected consequences of the defendant’s deceitful actions.
* The plaintiff’s business suffered a decline in reputation and customer trust following the misrepresentation.
* The plaintiff was unable to recover the funds lost due to the reliance on the defendant’s fraudulent claims.
(See Grant Thornton LLP v. Prospect High Income Fund, 314 S. W. 3d 913 (Tex. Supreme Court 2010). Ernst & Young, L.L.P. v. Pacific Mut. Life Ins. Co., 51 S. W. 3d 573 (Tex. Supreme Court 2001).)
If you’re in court without a lawyer and plan to assert a Claim of Fraudulent Misrepresentation, 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 effectively navigate your legal journey.
Prove Your TX Fraudulent Misrepresentation Claim
U.S. Civil Cases Only