Fraudulent Misrepresentation

Fraudulent misrepresentation (fraud) requires: false statement of material fact, knowledge it's false (or reckless disregard for truth), intent to induce contract, reliance on statement, damages. Example: seller says 'roof is in perfect condition,' knowing it leaks. This is fraud. Fraud allows rescission: contract is voidable, buyer can rescind and recover earnest money, plus damages. Fraud is more serious than mere misrepresentation: requires scienter (knowledge of falsity), not just inaccuracy. Innocent misstatement isn't fraud: if seller genuinely didn't know about roof leak, it's not fraudulent (though might be negligent misrepresentation). Fraud includes active misstatement and concealment: hiding known defect might be fraud. Fraud is difficult to prove: requires evidence of knowledge and intent. Verbal fraud can be hard to prove (he said/she said). Written fraud is easier (email admitting knowledge). Understanding fraud: it's serious and might allow rescission even after closing.