In business, contracts are the backbone of deals, partnerships, and growth. But what happens when one side enters into an agreement based on lies or misleading promises? That’s where fraudulent inducement comes in. It’s not just unfair—it’s unlawful. At Gearhart Law, we help business owners and professionals protect their interests when trust is broken. If you’ve signed a contract based on false claims, you may have legal options.
What Is Fraudulent Inducement?
Fraudulent inducement happens when someone lies or misleads you into signing a contract. It’s not just a misunderstanding or buyer’s remorse—it’s a false statement made with intent to trick you into doing something you wouldn’t have done otherwise.
This type of fraud has to happen before the contract is signed. The lie must be about something significant (what lawyers call “material”), and you must have reasonably relied on that lie when deciding to go through with the deal.
For example, let’s say you were told a business had signed contracts with major clients before you agreed to buy it. If those contracts didn’t actually exist, and you relied on that information when signing, that could be fraudulent inducement.
Common Situations Where Fraudulent Inducement Arises
This issue comes up in all kinds of commercial deals. Here are a few common examples:
- A seller inflates profits to make a company look more valuable
- A landlord hides known defects before leasing commercial space
- A franchisor promises support or marketing that they never intended to provide
- An investor is pitched unrealistic projections that were never grounded in facts
If someone made a false promise or misrepresented the truth to get your signature, you may be dealing with more than just a bad business decision.
Proving Fraudulent Inducement Under New Jersey Law
To make a claim for fraudulent inducement, we need to show four things:
- A false statement was made about something important
- The person who made it knew it wasn’t true or acted recklessly
- You relied on that statement when agreeing to the contract
- You suffered financial harm as a result
It’s not always easy to prove intent, but emails, text messages, recorded calls, and other documents often tell the story. We’ll work with you to gather everything we need and help you understand what a court will look for.
Sometimes, this process helps clients realize their claim is stronger than they thought. Other times, we uncover other legal claims worth pursuing as well.
What Remedies Are Available?
If you were misled into a contract, the law offers several possible remedies:
- Canceling the contract (called rescission)
- Recovering financial losses caused by the deception
- Punitive damages in rare cases where the misconduct was extreme
Our goal is to put you in the position you would have been in if the fraud had never happened. That might mean getting out of a bad contract or being compensated for what you lost.
How We Help You Pursue a Fraudulent Inducement Claim
At Gearhart Law, we know how quickly a promising deal can turn into a legal headache. If something feels off about how a deal came together, we’ll help you figure out your next move.
Here’s how we support you:
- We review your contracts, communications, and other records
- We assess whether you have a strong claim
- We advise you on whether to pursue negotiation, arbitration, or litigation
- We fight to recover your losses and hold the other party accountable
We understand that these situations are personal and often high-stakes. We stay involved, responsive, and clear with you every step of the way.
Contact Our Experienced Summit, NJ Fraudulent Inducement Attorneys
Fraudulent inducement can do real damage to your business, your finances, and your peace of mind. You don’t have to let it go or try to fix it alone. If you think you were misled into signing a contract, we’re here to help. Contact Gearhart Law today to schedule a consultation. Let’s talk about what happened—and what we can do about it.