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Breach of Contract vs. Fraudulent Inducement

by | Oct 16, 2021 | Firm News |

There can be a subtle difference between a broken promise that constitutes a breach of contract and one that constitutes fraudulent inducement. The former requires nothing more than a showing that the promised performance was not delivered. The latter, on the other hand, requires a showing that the promise was made without the intention of it being performed in the first place. This is sometimes referred to as deceit. It is a difficult thing to prove, but when it can be proven, it changes the nature of the wrong to a tort and opens up a more substantial array of remedies, including the possibility of punitive damages. Does this mean that every breach of a promise should be presented in court as a fraudulent inducement claim? Of course not. Fraud claims fail more often than they succeed and they require a higher standard of proof, clear and convincing evidence, than do breach of contract claims.