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What You Must Prove to Win a Fraudulent Inducement Claim in New York

In the aftermath of a deal gone bad, some may be quick to claim that they were duped, or led down a false path and thereby coaxed into the deal, and should therefore be permitted to get their money back out (assuming that money is still around to be had).  In legal terms, this is generally referred to as "fraudulent inducement."

But, before you bring a claim under this particular cause of action, you should be forewarned: New York has specific requirements for these claims, and if they are not met, the Court is obliged to dismiss the action, often at its very outset.

To that end, New York's courts have set forth the pleading requirements (i.e., what you must set forth in your complaint), and stated as follows:

"To plead a cause of action for fraud in the inducement, a plaintiff must plead a misrepresentation or a material omission of fact which was false and known to be false by defendant, made for the purpose of inducing the other party to rely upon it, as well as justifiable reliance of the other party on the misrepresentation or material omission and injury caused as a result of that reliance (see Orchid Constr. Corp. v. Gottbetter, 89 AD3d 708 [2d Dept. 2011]; Northeast Steel Prods., Inc. v. John Little Designs, Inc., 80 AD3d 585 [2d Dept. 2011]; Hense v. Baxter, 79 AD3d 814 [2d Dept. 2010])."

A word of caution is in order here: this is not an easy thing to prove.

For additional information on this topic, please see "Why Some Fraudulent Inducement Claims in New York Are Doomed to Fail."