Houston Fraud & Misrepresentation Lawyers
What is 'Fraud' in Business Litigation?
Business fraud involves an individual or business entity’s intentional deception of another to profit or gain an advantage. Anyone involved in commercial transactions and contractual relationships face inherent risks related to fraud, including fraud that comes from within an organization and its employees, as well as fraud involving other parties.
What to do if your business is involved in a business fraud dispute:
Because fraud creates significant threats to a business and its financial solvency, taking appropriate steps to pursue legal remedies and compensation for any losses is critical to success. Additionally, for those who stand accused of corporate or business fraud, threats to one’s personal reputation and future make legal counsel a top priority.
At Hendershot, Cowart & Hisey, P.C., our Houston-based practice focuses heavily on protecting businesses against fraud, breach of fiduciary duty, misrepresentation, and losses through proactive counseling and the development of clear and enforceable contracts. We also protect the interests of businesses across Texas when litigating to remedy the situation or defend against accusations.
Types of Cases Our Legal Team Takes
- Fraud – The deliberate, intentional representation of facts which the defendant knew to be false, in order to deceive the plaintiff into entering an agreement. Fraud is a statute violation, meaning it’s a violation of a written, codified law.
- Misrepresentation – The representation of false information which the defendant believed to be true at the time the agreement was made but were later proved to be false. This violation is a violation of contractual law, where one party breached the terms of an agreement.
- Breach of Fiduciary Duty – A violation of the relationship between a fiduciary (e.g. an accountant, a shareholder, an employee, anyone who is obligated to act in another’s interest) and another party. Breach of fiduciary duty is a legal theory applied in common law, meaning the judge mainly relies on previous cases to render judgement.
Business Fraud and Misrepresentation Take Many Forms:
Business fraud takes many forms, which is why it is critical businesses work with attorneys who have the breadth of experience needed to handle and address a range of issues. From internal theft and deception within company ranks to contractual breaches caused by misrepresentation and fraudulent conduct of third parties, we handle the full range of cases.
These include, among others:
- Fraudulent misrepresentation
- Bribery, payoffs and kickbacks
- Misappropriation of trade secrets
- Theft of trade secrets
- Patent and trademark infringement
- Embezzlement
- Non-compete violations
Proving Fraud & Misrepresentation
When a party enters into an agreement by making a representation of a false material fact, they can be held liable for damages.
To prove fraud and prevail in a claim, several elements must be established:
- The defendant made a material representation
- The material representation was false
- The representation was known to be false by the defendant, or made recklessly without knowledge of its truth
- The defendant intended for the plaintiff to rely upon the representation
- The plaintiff acted upon the representation
- The plaintiff suffered damages as a result
It is important to note a defendant can also be guilty of fraud involving the deliberate failure to disclose a substantial material fact. In these cases, it must be proven that the undisclosed material fact created a false impression which was relied upon by the plaintiff and ultimately resulted in damages.
Representations of material facts defendants knew to be true (as innocent or negligent misrepresentation) may also be grounds for legal remedy. These forms of misrepresentation lack a deliberate intent to deceive the plaintiff and are handled differently.
- Innocent Misrepresentation – The party that made the representation reasonably believed the information provided to be true. This form of misrepresentation is generally remedied through rescission, which means the transaction or contract will be treated as though it never existed.
- Negligent Misrepresentation – The party that made the representation believed the information to be true, based upon no reasonable grounds. This form of misrepresentation can be remedied with rescission, along with civil damages.
Proving fraud and misrepresentation requires a meticulous evaluation of the facts and circumstances surrounding your business, professional relationships, contracts, and transactions. It also necessitates the gathering of evidence to prove a defendant’s intent, which may be highlighted through subsequent acts made after a false material fact was represented. Our team thoroughly explores our clients’ situations to help them determine their available options, crafts strategies to secure the results they need, and litigates when necessary.
Take a Stand Against Business Fraud
Hendershot, Cowart & Hisey, P.C. has solidified our reputation as experienced and zealous advocates for businesses across Texas. If you wish to take a stand against fraud with our proven Houston-based attorneys, or are currently facing investigations or allegations related to fraud, we are readily available to discuss your rights and options during an initial consultation.
Contact us to get started.
