The Law of Fraud

Fraud consists of inducing a person to enter a contract by making false representations or concealing material facts that should be disclosed. This type of fraud is often asserted as a defense to a contract. For example, a seller of a house might misrepresent that the house has a new roof, when in fact the house does not have a new roof. Fraud can even include a promise made without any intent of later performing the promise.  Fraud is defined at Civil Code §§1566–1574; and 1710.

If a special relationship exists (sometimes known as a confidential relationship or a fiduciary relationship, such as the duty an agent owes to his principal or the duty a trustee owes to the beneficiaries of a trust), fraud can also include any advantage the fiduciary obtains by reason of his/her position. Some examples may be: acquiring property from a trust for a bargain price, entering a transaction with the trust while acting as trustee, or obtaining an advantage over the other beneficiaries of a trust. (Civil Code §1573)

An attorney-client relationship is not created between the client and the law firm until the attorney and client execute a written retainer agreement describing the legal work to be performed.

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