Wednesday, June 15, 2011
Inducing statements: fraud or mere opinion?
In his February 22, 2011 letter opinion in Environmental Staffing Acquisition Corp. v. Beamon Enterprises, Inc., CL09-2688, 3 Cir. CL092688, Judge Melvin of Portsmouth Circuit Court concluded that a subcontractor's statement during the proposal process that the subcontractor "had exactly what you are looking for" was a matter of opinion, and not a fraudulent statement giving rise to a claim of fraud in the inducement. This case includes a detailed analysis of Virginia law on fraud, and also deals with the foundation question of the prima facie elements of fraud in the inducement, including the present intention to not act as one is representing, as opposed to just not later following through in breach of one's contract. Drafters seeking to establish a fraud in the inducement count, or defeat one, should find the opinion of interest.