How Are Fraud and Contract Laws Related?
To form a contract, there must be a meeting of the minds between the two parties on what the object is and what the obligations on both sides are going to be. In other words, what must each party do to properly perform its obligations under the terms of the contract. To form the contract, each party must have represented to the other that he could perform what he’s agreed to do. In cases of fraud, one party has lied, made false promises, omitted important facts. For example, a construction contractor has never performed this particular type of work before and has no ability to perform the work; he fraudulently induces the homeowner to enter into a contract to get a deposit, and keeps the deposit without performing the work. This suggests the contractor never had any intention of performing the work. This is an example of one being fraudulently induced to enter into a contract. This scenario has happened way too often in Florida.
If Someone Doesn’t Appear to Perform on the Same Level as the Ability They Portrayed, Is That Enough to Be Considered Fraud?
Typically, if someone hasn’t performed the way they were supposed to under the contract, that would simply be a breach of contract. The breaching party didn’t perform to the quality expected, but it’s different from the situation where there was no intention from the outset to not honor the promised obligations.
However, there may be fraud where one has promised to perform its obligations in a certain way but ultimately performed in a vastly inferior way, in order to maximize profit at the expense of the victim of the fraud.
How Can It Be Determined If Someone Never Had the Intention to Fulfil a Contract?
We have to look at all of the circumstances that existed at the time that the person made the material misrepresentations and entered into the contract. This is basically 2020 hindsight, meaning we look back with more knowledge of what the true facts are, information we did not have at the time of negotiation. For example, after entering into a contract, the owner learned that the contractor hired did not have the necessary equipment or experience the contractor claimed to have had in order to get the job. Even though one cannot read the contractor’s mind, evidence may establish that he never had the equipment, manpower, or knowledge to do what he said he was going to do. In that case, one may infer he never had the intention of doing the work as promised and he made those false promises in order to take off with the deposit.
If the Other Party Has Obviously Gone Past the Time Limit Stipulated in the Contract, Is That an Indicator of Whether They Intend to Fulfil the Contract?
Yes, it may be. Many contracts will have a timeframe within which certain benchmarks must be met and the job completed. If those time limits are not met, it could be a mere breach of contract, if the contractor is still diligently performing the work. But, if they are not working, or working only sporadically, this may be evidence they never intended to fulfill the contract. Some contracts do not provide time limits. In those cases, it’s implied that the performance must be completed within a reasonable amount of time. What’s reasonable will vary for the specific job.
Can Someone File a Fraud Claim Simultaneously or Within a Breach of Contract Lawsuit?
Yes, a fraud claim can be filed with a breach of contract claim, and that’s done frequently. These are alternative causes of action. As the proof develops during the course of the case, the Plaintiff can elect to pursue the fraud or the breach of contract claim, depending on how discovery has developed.
For more information on Fraud and Breach of Contract Law in Florida, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (954) 900-9575 today.