South Carolina Fraud Attorney

What is fraud in the inducement?

To establish a claim or defense of fraud in the inducement, a plaintiff must prove the nine elements of fraud as well as the following three elements: “(1) that the alleged fraudfeasor made a false representation relating to a present or preexisting fact; (2) that the alleged fraudfeasor intended to deceive him; and (3) that he had a right to rely on the representation made to him.” Moseley v. All Things Possible, Inc., 388 S.C. 31, 35–36 (Ct. App. 2010), aff’d, 395 S.C. 492 (2011).

The false representation must be predicated upon misstatements of fact rather than upon an expression of opinion, an expression of intention or an expression of confidence that a bargain will be satisfactory.  Bishop Logging Co. v. John Deere Indus. Equip. Co., 317 S.C. 520, 527, (Ct. App. 1995) (citing Winburn v. Ins. Co. of N. America, 287 S.C. 435 (Ct. App. 1985)). The distinction between a matter of fact and a matter of opinion is generally characterized by what is susceptible of exact knowledge when the statement is made. Gilbert v. Mid–South Machinery Co., Inc., 267 S.C. 211, 227 S.E.2d 189 (1976) (statement about profitability of business was statement of fact given existence of business records when statement was made).

Ordinarily, to be actionable, a statement must relate to a present or pre-existing fact, and cannot be predicated on unfulfilled promises or statements as to future events.  Davis v. Upton, 250 S.C. 288, 291 (1967). “However, where one promises to do a certain thing, having at the time no intention of keeping his agreement, it is a fraudulent misrepresentation of a fact, and actionable as such.”  Id.  “[E]ntering into an agreement, with no intention of keeping such agreement, constitutes fraudulent misrepresentation; however, mere breach of contract does not constitute fraud.”  Adams v. G.J. Creel and Sons, Inc., 320 S.C. 274, 277 (1995).  A future promise is not fraudulent unless such promise was part of a general design or plan, existing at the time, to induce a party to enter into a contract or act as he or she otherwise would not have acted, to his or her injury.  Bishop Logging Co. v. John Deere Indus. Equip. Co., 317 S.C. 520, 527 (Ct. App. 1995) (quoting Coleman v. Stevens, 124 S.C. 8, 16 (1923)).  “Evidence of mere nonperformance of a promise is not sufficient to establish either fraud or a lack of intent to perform.”  Woods v. State, 314 S.C. 501, 506 (Ct. App. 1993).  An inference of a lack of intent to perform a promise can only be made when nonobservance of a promise is coupled with other evidence.  Id.