A tort is a bad or wrongful act that may violate the rights of other people. Torts are a central theme in personal injury law, particularly when one person’s negligent or wrongful behavior causes another to suffer a physical injury or loss. However, in Portland and jurisdictions throughout the nation, torts can happen in other important contexts.

For example, business torts are an area of business law that concern the wrongful acts that individuals can commit in their corporate and commercial dealings. The business tort of fraudulent misrepresentation is a serious business tort that concerns the validity of contracting that two parties may use to establish their business relationship. This post will break down the elements of fraudulent misrepresentation but as with all posts on this blog, readers are reminded that no legal advice is provided.

When two parties agree to form a contract, they must agree to the terms of their deal. They must know and understand what each will bring to the relationship, how each will deal with the actions of the other, and what remedies they will have if the other breaches their terms. If one party makes a false or fraudulent statement during negotiations, the tort of fraudulent misrepresentation may begin to form.

In order for the tort to exist, the fraudulent statement made by one of the parties must be false and must known or should be known to be false by the party that states it. The other party must rely on that misrepresentation in order to form the parties’ agreement, and the relying party must suffer losses as a result of their reliance.

If a business entity can demonstrate these and other elements of fraudulent misrepresentation, they may be entitled to the recovery of their damages. Consultation with business law attorneys can help business owners understand what options they may have when they are harmed by the torts of others.