Nashville, TN – Businesses and individuals always need to be mindful of potential problems when they are bound to terms within contracts. The ability to make contracts and rely on their terms is foundational to the process of doing any kind of business, and the law regulates certain aspects of contract formation to assist individuals and companies who are trying to legitimately find success. 

In some cases, one of the parties to the contract may have represented some of the terms, either intentionally or negligently. Businesses should be aware of the fact that there may be financial consequences to the party that misrepresented their situation, and that it is possible to file a lawsuit to recover any losses associated with the transaction. 

Fraudulent misrepresentation in contracts

There need to be certain findings made by a court to find that a party to a contract is liable for fraudulent misrepresentation. The defendant essentially needs to have represented a fact as true at the time the contract was executed, knowing that it was false at the time. The plaintiff also needs to show reliance on that fact and losses due to the defendant’s actions. 

This is the process to show fraud for a civil contract law case, where businesses or individuals that engage in more serious kinds of fraud may also face criminal consequences.  

Negligent misrepresentation

Negligence can happen in various situations where a party is not careful enough and they cause harm to others. This is true in contract formation as well. The plaintiff needs to show that the defendant gave false information regarding the terms of the contract, and that the defendant did not exercise the appropriate level of care in the process of obtaining or verifying the information. The plaintiff then needs to show that they relied on this information after the transaction. 

Damages available for contract misrepresentation

If the plaintiff is successful in these types of actions, they will be able to receive various types of compensation. There may be equitable remedies such as injunction or rescission of the contract available, although this is less common. 

The main type of damages available are compensatory damages to pay the plaintiff back for any losses that can be shown to be directly from the defendant’s actions. This can include things like lost profits, property purchase or rental costs, inventory costs, costs associated with employment and hiring, and projected future losses. 

Assistance from a business attorney

The Law Office of George Fusner is a firm that helps with various business law issues in the Nashville area. Anyone who needs information about the services provided by a business attorney can get in touch with the firm to learn more.

Firm contact info:

The Law Office of George R. Fusner

7104 Peach Court, Brentwood TN 37027


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