Friday, August 12, 2011

Fraudulent inducement claim requires contract as one of its elements

No viable fraudulent inducement claim in the absence of a contract

A fraudulent inducement claim arises solely in the context of a contract and requires the existence of a contract as part of its proof. Haase v. Glazner, 62 S.W.3d 795, 798 (Tex. 2001). The issue of whether a contract was induced by fraud is a dispute involving the parties’ agreement. In re J.D. Edwards World Solutions Co., 87 S.W.3d 546, 550 (Tex. 2002).

SOURCE: Beaumont Court of Appeals - 09-11-00349-CV - 8/11/11


A contract is subject to avoidance on the ground of fraud. Williams v. Glash, 789 S.W.2d 261, 264 (Tex.1990); see Cecil v. Zivley, 683 S.W.2d 853, 857 (Tex. App.-Houston [14th Dist.] 1984, no writ). To prevail on a fraudulent-inducement contention, a party must establish the elements of fraud "as they relate to an agreement between the parties." Haase v. Glazner, 62 S.W.3d 795, 798-99 (Tex.2001).
The elements of fraud are (1) a material misrepresentation, (2) made with knowledge of its falsity or without any knowledge of the truth and as a positive assertion, (3) made with the intention that it should be acted on by the other party, and (4) the other party acts in reliance on the misrepresentation and thereby suffers injury. See Formosa Plastics Corp. USA v. Presidio Eng'rs & Contractors, Inc., 960 S.W.2d 41, 47-48 (Tex.1998).

SOURCE: Houston Court of Appeals -   No. 14-09-00312-CV - 7/26/2011
McLernon v Dynegy, Inc, 347 S.W.3d 315 (Tex.App. - Houston [14th Dist.] 2011)

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