How Do I Prove the Fraud Element of Their “Intent”?

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How Do I Prove the Fraud Element of Their “Intent”?

Next is the element of” intent.”  Defendant must intend that the creditor or factor rely on the representation.  Many Texas collection cases, and in addition, the treatise known as the Restatement of Torts, states that to prove intent, the creditor must establish that the Defendant desired to cause the consequences of its act or believes that the consequences were substantially certain to occur.  Fraudulent inducement, is an area ripe for litigation between factors and their client, or between a factor and the client’s customers,  in that, the Defendant usually must have a reason to expect that the creditor will enter into a binding agreement, based upon their false representation.  Reliance is also a key element and is usually discussed in terms of a creditor establishing in its lawsuit that it knew of the false representation and actually acted upon it.  In the fraudulent inducement area, the creditor or factor will prove that it actually entered into a binding contractual agreement, based upon the false representation.  Plaintiff’s attorney would be cautioned, in this area of the law, to affirmatively plead the words “induce” or “inducement” or possibly the fraud claim is waived.  Often factors will insert a provision into the factoring agreement that the factor is relying on the representations of its client, and the representations are being made to induce the factor to purchase invoices under the agreement.  Also, Plaintiff must establish that it justifiably relied on the representation by Defendant.

In proving that the creditor has been damaged, the factor or creditor will establish that the false representation by Defendant was the cause of injury.  It has sometimes been stated that the Plaintiff will prove that the Plaintiff was relying upon Defendant’s false representation “to the Plaintiff’s detriment.”  The creditor or factor must, obviously, plead and then prove that the Defendant’s fraud resulted in damages, and also, consequential damages to the creditor.

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*The foregoing is not intended to provide specific legal advice, but instead only as a generalized discussion

Sam Emerick, Collections Attorney

Sam Emerick has over 35 years
experience in Commercial Collections Law,
Factoring Litigation and Wills, Trusts & Probate

By |2017-06-01T14:46:51+00:00June 1st, 2017|Collections, Texas law|Comments Off on How Do I Prove the Fraud Element of Their “Intent”?

About the Author:

Mr. Emerick, a seasoned collection lawyer in Dallas, and owner of the Law Offices of Sam Emerick, P.C. helps creditors obtain payments on loans and debts. Mr. Emerick delivers prompt, efficient and tangible results to creditors. The Law Offices of Sam Emerick help creditors who are frustrated attempting to collect debt. Many times, creditors believe that they will be able to resolve the problem on their own; a letter requesting payment, a phone call asking for an explanation, or a proposed meeting. Unfortunately, these measures rarely produce any tangible results.