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How to Prove Misrepresentation in a Business Litigation Case

By: LS Carlson Law April 13th, 2023

Misrepresentation occurs when one party in a business transaction makes false statements or fails to disclose material information, leading the other party to suffer financial harm. In a business litigation case, proving misrepresentation can be challenging but essential to achieving a successful outcome. In this blog post, we'll discuss how to prove misrepresentation in a business litigation case.

Identify the False Statements or Omissions

The first step in proving misrepresentation is to identify the false statements or omissions made by the other party. This can include misleading advertising, misrepresentations about the quality or characteristics of a product, or failing to disclose material information. As an example, we recently had a client retain us after the business acquired commercial property. However, it was determined after the sale that the seller falsified one of its tenants’ profit-and-loss statements – in essence, concealing the fact that the tenant was unable to keep current on its rental payments. Thankfully, the law protects our client from this sort of misconduct, and we are prosecuting the matter accordingly.

Establish the Materiality of the False Statements or Omissions

The next step is to demonstrate that the false statements or omissions were material and influenced the other party's decision to enter into the transaction. Materiality means that the false statements or omissions were significant enough to affect the other party's decision-making process.

Show the Intent to Deceive

To prove misrepresentation, you must show that the other party intended to deceive you. This can be challenging, as intent is often difficult to prove. However, circumstantial evidence can be used to demonstrate the other party's intent.

Demonstrate the Reliance on the False Statements or Omissions

Finally, you must demonstrate that you relied on the false statements or omissions made by the other party and suffered financial harm as a result. This can include lost profits, decreased sales, or additional expenses incurred as a result of the misrepresentation.

At LS Carlson Law, our experienced business litigation attorneys can help you prove misrepresentation in a business litigation case. We understand the complexities of these cases and will work to ensure that you receive the compensation you deserve. Our team provides comprehensive legal representation to businesses in Orange County, California, and is dedicated to helping you achieve the best possible outcome for your case. Contact us today to schedule a consultation.

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