elements of fraud in Texas

Feeling like you have been taken advantage of is a terrible experience.

In both personal and business dealings, no one wants to believe they have been defrauded. However, knowing the elements of fraud in Texas can help you know when you have a claim.

If you think you have been a victim of fraud, Texas law may allow you to recover damages. 

Under Texas law, a party can recover damages that result from another party’s fraud.

If you think a party knowingly made a false, material representation with the intent to induce you to act, you may have a case for fraud.

If you relied on that false representation and incurred damages, speak with a Texas fraud attorney right away. These are key elements of a fraud claim you will want to discuss with knowledgeable counsel.

In this article, our Hunnicutt Law Group team will walk you through the elements of fraud in Texas. We will help you spot what fraud looks like if it happens to you.

We will also discuss when to file a fraud claim so you do not miss out on your chance to collect damages and be made whole.

What Are the Elements of Fraud in Texas?

If you have been the victim of fraud, it is essential to understand how to make out a claim in court to recover your damages.

To establish the elements of a fraud claim under Texas law, you need to demonstrate the following:

  • A party made a material representation;
  • That representation was false;
  • The party who made the false representation acted knowingly or recklessly;
  • The party intended to induce you to act (or not act) in some way upon their representation; and
  • You justifiably relied on their representation, which caused you injury.

This is just the backbone of a fraud claim. Once you have demonstrated the legal elements of a fraud claim, you will need to provide facts and evidence to prove your case.

What Types of Fraud Claims Does Texas Recognize?

Fraud is a broad term for many specific types of legal claims. The elements of fraud in Texas may differ depending on the specific fraud committed in your case.

Texas recognizes a variety of fraud-related claims, including the following:

  • Statutory fraud,
  • Fraudulent inducement,
  • Fraudulent misrepresentation (also known as “actual fraud”) In Texas, to prove fraudulent misrepresentation, a plaintiff must show that the defendant made a false representation that was material. This means the defendant’s words or actions indicated a fact was true when it was not.,
  • Constructive fraud,
  • Fraudulent nondisclosure,
  • Negligent misrepresentation, and
  • Fraudulent transfer.

This is not an exhaustive list. Texas also recognizes other fraud claims by statute or by common law. The elements of fraud in Texas may vary slightly between claim types, so fraud claims represent a rather complicated area of the law.

That is why you need to speak with an experienced Texas attorney if you’ve been a victim of fraud.

Common Types of Fraud Claims in Texas: Statutory Fraud

Claims for statutory fraud contain slightly different elements than the usual Texas fraud elements. These cases usually have to do with real estate fraud or stock exchange fraud.

These markets have their own statutory rules. In these cases, a plaintiff does not need to prove that a defendant has made knowingly false or reckless statements to prevail in court.

An example of statutory fraud would be if a real estate broker lied about the condition of a house, claiming it was in mint condition. In reality, the house was a dilapidated money pit.

If an out-of-area buyer believed the broker and bought the house sight-unseen based on the real estate broker’s word, they may have a claim for statutory fraud. 

Common Types of Fraud Claims in Texas: Fraudulent Inducement

Another example is fraudulent inducement in Texas. This is a particular type of fraud that usually arises in the context of a contract.

The most common form of fraudulent inducement occurs when one party lies about the terms of the contract to convince the other party to sign.

With a fraudulent inducement claim, the elements of fraud must be established as they relate to an agreement between the parties.

Have Questions About Fraud and When to File a Claim?

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Is There a Difference Between Fraud and Breach of Contract?

A breach of contract is slightly different from fraud. However, a contract can be made or breached by fraudulent means. 

As we all know, a contract requires the parties to abide by it, and if one party breaches and the other party suffers damages, the second party may have a claim on which to recover.

Importantly, in breach of contract matters, intent is irrelevant. The only thing that matters is whether the promise was fulfilled. 

Fraud, on the other hand, requires an intent to deceive. Sometimes it can be tricky parsing all these elements of fraud when filing a claim.

Contact a Texas business litigator today if you are struggling to identify whether filing a fraud claim in Texas is right for you. We can help you understand your rights and file your claim correctly and effectively.

When Should I File a Fraud Claim?

In Texas, the statute of limitation for fraud is four years. So, this means it can be challenging to identify the exact moment of the statement that changed everything. An experienced lawyer can help you do this.

How Hunnicutt Law Group Helps Fraud Victims in Texas

Do not navigate fraud on your own. The Hunnicutt Law Group brings a big firm feel to our work but has the hands-on touch of the small firm that we are.

We get to know our clients and take them through every step of the process from start to finish—no passing you off to a dozen different lawyers along the way.

Contact the Hunnicutt Law Group for questions about the elements of fraud in Texas and to protect you from being a victim of fraud.

We can even do a video conference if you prefer or your schedule makes a face-to-face meeting impractical.

Author Photo

J. Stephen Hunnicutt

Our founding attorney, Stephen Hunnicutt, set the precedent for a commitment to excellence and a focus on the client. With 25 years of experience, he has handled countless cases involving business litigation and commercial litigation. Over the years, Mr. Hunnicutt has worked as in-house counsel for a Fortune 500 energy company, a large firm, a small firm, and finally, in his own practice.

Read more articles by Stephen Hunnicutt

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