As you know, fraud is generally a misrepresentation of facts. There are, of course, other requirements. The misrepresentation must be intentional, and made to obtain a benefit, such as money. Lawyers generally call intent to misrepresent scienter. Frequently this is the most difficult requirement to prove
To be actionable, the misrepresented fact must be the reason why you gave something of value to the perpetrator. If the fact were true, you would have gone forward with the transaction. If the fact were untrue, you would not have gone forward with the transaction.
Of course, you must pay a lawyer to pursue your claim. You may find a good lawyer who will represent you, for a contingent fee. If you lose, you do not have to pay. If you win, you pay a percentage of your recovery to your lawyer. However, frequently fraud is just a cause of action thrown into the mix, along with causes of action based upon other reasons, such as breach of contract. You may have to pay a lawyer an hourly rate for this type of case.
Retrieving what you lost due to the fraud is one aspect of recovery. Everybody knows about punitive damages. You may also be able to recover this type of damages, as the fraud may be particularly egregious. Scienter is important in the jury’s decision about punitive damages. A thorough discussion of the subject of punitive damages is beyond the scope of this blog entry.
There are some other causes of action based upon misrepresentation that you may plead, in addition to the active misrepresentation. Instead of saying something false, the perpetrator can hide something that, if known, would cause the victim to make a different decision, such as whether to pay the perpetrator for something. This cause of action is known as “fraud by nondisclosure”.
Another cause of action based upon a misrepresentation is “negligent misrepresentation”. This cause of action is not fraud, but is related to fraud. Both contain a misrepresentation. However, this cause of action does not require that the misrepresentation be intentional. Scienter is not necessary here. Instead of intent, we have a misrepresentation made due to negligence. The defendant should have known that her/his representation was not true. The defendant did not investigate to determine the truth, when a reasonable person would have.
The cause of action for negligent misrepresentation is frequently plead along with fraud. If you can’t prove intent, then argue that the behavior was negligent. In fact, I plead, when I can, all three causes of action—fraud, fraud by nondisclosure, and negligent misrepresentation.