A recent lawsuit demonstrates how business disputes may sometimes go beyond breach of contract claims by alleging fraud.
In a business transaction, a claim of fraud may arise if one of the parties to a transaction accuses the other of making material false statements or intentionally omitting material facts. If the other side was induced into a contract by relying on the other party’s misrepresentations, it may be able to obtain damages or possibly even void the contract at issue.
A California jeweler recently found itself defending against a claim of business fraud from a sports celebrity: Boston Red Sox player David Ortiz. Ortiz claims the jeweler misrepresented the value of the items he purchased, which included a diamond bracelet, a set of diamond earrings, and a diamond-studded watch. Ortiz claims he discovered the misrepresentation after he had the items independently appraised. Ortiz confronted the jeweler, who allegedly promised him a refund. However, when payment wasn't made, Ortiz filed a lawsuit. The complaint includes claims of fraud and breach of contract.
The types of transactions that may give way to business fraud allegations can be varied, involving real estate, vending agreements or even the purchase or sale of a business. Although this story involves a lawsuit, an attorney that focuses on business litigation knows that there is a range of advocacy available to business clients. A business that markets its product to the public may want to avoid the negative publicity of a lawsuit involving fraud. For that reason, negotiations outside of the public eye may be an option. In this case, Ortiz may not have initiated litigation if he had simply received his refund.
Source: CBS Boston, “Ortiz Suing California Jeweler For Selling Him Imitation Jewelry,” Nov. 5, 2014