Thursday, September 1, 2011

Pennsylvania Civil Fraud Law


The Law of Civil Fraud in Pennsylvania

A person in Pennsylvania is liable for fraud if/when they make a fraudulent misrepresentation of material fact to another person. In PA, a person liable for fraud is responsible for all injuries resulting from that other person’s reliance on the fraudulent misrepresentation.

In order for the injured person to recover against the defendant for fraud, it must be proven: (1) that the defendant made a misrepresentation to the plaintiff, (2) that the misrepresenta­tion made by the defendant to the plaintiff was fraudulent, (3) that the misrepresentation was of a material fact, (4) that the defendant intended that the plaintiff rely on the defendant’s misrepresentation, (5) that the plaintiff relied on the defendant’s misrepresentation, and (6) that the plaintiff’s reliance on the defendant’s misrepresentation was a factual cause of the harm suffered by the plaintiff. You need to prove each and every one of these points to establish a claim for fraud in Pennsylvania

Now to break down the legalese into somewhat plain English….

A “misrepresentation” is any action, by one’s words or conduct that differs from the true facts of a given situation facts. An assertion by words, for example, can arise from statements on the labeling or advertising of a product. An assertion by conduct could arise from a usage of trade or a course of dealing. A usage of trade is any practice or method of dealing that has been regularly relied on by people in a particular place, trade, or vocation. Because a usage of trade is so regularly observed, a buyer may justifiably expect it to be observed by the seller in any sale. A course of dealing arises from the previous conduct between the buyer and seller. The course of dealing establishes a common basis for understanding each other’s expressions or conduct. An assertion by conduct may also arise when the seller knows the particular purpose for which the user or consumer requires the goods or product, and the seller furnishes the goods or product for that particular purpose.

A misrepresentation is “fraudulent” when the person making the misrepresentation (a) knows that it is untrue, or (b) does not believe it is true or is indifferent as to whether it is true, or (c) by reason of special circumstance has a duty to know whether it is true. You only need one of these to establish that the assertion was fraudulent.

A fact is “material” if it is something that would be important to a reasonable person in making a decision. A material fact need not be the sole or even a substantial factor in inducing or influencing a reasonable person’s decision. A fact is also material if the maker of the misrepresentation knows that the person to whom it is made is likely to regard it as important even though a reasonable person would not regard it as important.

Lastly, “reliance” means a person would not have acted (or would not have failed to act) as he or she did unless he or she considered the misrepresentation to be true.

Fraud is an intentional act and thus subject to punitive damages.

If as a result of someone's fraudulent actions you have been caused financial harm you should speak with an attorney immediately to learn about your legal rights.

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