NEGLIGENT MISREPRESENTATION

To prove fraud, one must show that the false statement was made intentionally. That means you must prove that the other side either knew the statement was false, at the time it was made, or that the statement was made recklessly, without regard for whether it was true or not.

It is not often easy to prove that someone else knew that a statement was false, or made it recklessly.  Quite often, an injured party may be able to prove every part of a fraud case, but not intent.

In that case, there is a lesser form of fraud called negligent misrepresentation.  It is identical to intentional fraud, except that the injured party need only prove that, when the false statement was made, the party making it had no reasonable basis for believing it to be true.  In negligent misrepresentation cases, however, the injured party can only recovery compensatory damages; he or she may not obtain punitive damages.

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