When you enter into a business relationship, you will want to go through due diligence and have a contract drafted and reviewed by a competent attorney. However, even if you enter into a deal with the best of intentions, sometimes the other side has anything but. Perhaps they hid some unpleasant information or told you something that turned out to be untrue.
Unfortunately, business fraud is a common occurrence, even here in Texas. As a result, many people lose substantial sums of money from the misrepresentations of others. If that has happened to you, you are going to need the assistance of an experienced business fraud attorney to represent you and to help you choose a legal remedy that makes the most sense for your situation.
What is business fraud?
Under Texas law, fraud is the misrepresentation of a material fact to another party under a contract or agreement. The injured party has to prove that there was a misrepresentation, that he or she relied on this false claim, and that they were injured as a result of the reliance. Unless the claim involves statutory fraud, which concerns stock and real estate transactions, the plaintiff will also have to prove that the defendant knew the statement to be false.
Sometimes, if a party remains silent about something, this can be considered fraud as well. In some cases, the parties have a duty to disclose information to each other. If a party in an agreement requests documentation, it will be considered fraudulent to omit or alter a document. In addition, in some cases, misrepresentation will include an omission of a fact that will render the remaining statement that the party made false and misleading.
What are the remedies for victims of business fraud?
There are a number of different damages and civil remedies that you may be entitled to if you have been a victim of business fraud. The most obvious are economic damages. This can include the lost profits you expected to make if not for the other party’s fraud. You can also collect for your out of pocket expenses.
There are other damages available if you can prove that the other party violated the Texas fraud statute, including exemplary damages. These are also known as treble or punitive damages, as they seek to punish the wrongdoer by multiplying the actual damages the injured party suffered by three. So, if you would have expected a net profit of $100,000 from the transaction, if you are entitled to exemplary damages, your award will be $300,000.
In some cases, you will be entitled to court costs and reasonable legal fees. This will depend on the circumstances of the case, including whether the contract contained language awarding the prevailing party legal fees. In addition, you may be able to collect for mental anguish if you can prove that you suffered emotional or psychological injuries as a result of the other party’s fraudulent conduct.
Beyond suing for monetary damages, Texas provides equitable remedies for business fraud cases. For example, if the defendant was supposed to perform a duty or supply a product or material, the plaintiff can sue for specific performance requiring that these be provided. Conversely, a victim of fraud can request rescission of the contract in question. If granted, this will cancel the contract and restore the plaintiff to the position he or she was in at the time the contract was made. Texas law allows a party injured by business fraud to collect monetary damages while also enforcing an equitable remedy.
In many cases involving business fraud, the defendant may have engaged in conduct that violates federal or Texas criminal law. In these situations, you and your attorney can contact law enforcement to discuss your case, which may entitle you to restitution if the defendant is convicted. However, keep in mind that you cannot use the government as your private collection agency, and filing a false or misleading report is a crime in and of itself.
If you have been the victim of a business fraud, our firm can assist you with your claim
Despite their best efforts, many companies and individuals are the victims of business fraud each year. If you or your company have been victimized by the fraudulent conduct of a business partner or counterparty, the experienced business fraud attorneys at Ryan G. Cole Law can help you get the assistance you need for your case.