Fraud in Texas

Common-Law Fraud, Statutory Fraud, and Fraud by Nondisclosure in Texas

Navigating the complexities of fraud allegations becomes even more challenging when distinguishing between common-law fraud, statutory fraud, and fraud by nondisclosure. As seasoned Texas attorneys specializing in fraud cases, our mission at Nunis and Associates is to unravel the factors surrounding these legal concepts and empower our clients with a comprehensive understanding of their legal situation.

Common-Law Fraud: A Tapestry of Tradition

Rooted in centuries of legal tradition, common-law fraud is a concept based on intentional deception and its resulting harm. In Texas law, proving common-law fraud requires establishing key elements such as material misrepresentation, intent to deceive or recklessness representations, reliance on those false or reckless statements, and injury resulting from the misrepresentation. This common law has developed over hundreds of years of judicial rulings which must be analyzed to determine whether fraud has occurred, if that fraud has caused injury to the plaintiff, and if the plaintiff is able to recover their damages as a result of the fraud.

Statutory Fraud: Navigating the Legal Code

In contrast, statutory fraud emerges from specific legal statutes, most notably the Texas Business and Commerce Code §27.01. This statute has the same elements as common-law fraud, but specifically applies to transactions involving real estate or stock. Unlike common-law fraud, statutory fraud does not require proof of the defendant’s knowledge of the falsity or recklessness of their statement, relying instead on the explicit provisions within the statutes to establish liability.

Fraud by Nondisclosure: Hiding the Truth

Fraud by nondisclosure is based on a duty to disclose between the parties. When a party has a duty to disclose information but does not do so, and this failure to disclose by the defendant induces the plaintiff to take, or refrain, from some action, and the plaintiff was injured as a result, the claim of fraud by nondisclosure may apply. Typical situations where there is a duty to disclose are when there is a fiduciary relationship between the parties requiring disclosure, when the defendant discovered new information making their earlier representation misleading or false, or when the defendant only discloses part of the information required rather than the whole truth. Fraud by nondisclosure is a complex theory and the plaintiff’s recovery often depends on the relationship between the parties.

Key Differences and Practical Implications

Distinguishing between common-law, statutory fraud and fraud by nondisclosure is extremely significant in determining a plaintiff’s remedies. This understanding is critical in crafting effective legal strategies, as the proof required for each type of fraud, and the remedies available for each can markedly differ. For instance, in a common-law fraud action, the recovery of attorney fees is generally unavailable for the plaintiff. Conversely, statutory fraud may open the door for the plaintiff to recover attorneys’ fees and litigation costs. For each type of fraud, exemplary damages may be available.

Get in Touch

Whether you find yourself facing allegations of fraud or are seeking remedies as a victim, the expertise Nunis and Associates brings to their clients in investigating and analyzing fraud in Texas transactions ensures tailored guidance and advocacy for a favorable outcome. Our team at Nunis and Associates is here to provide expert guidance tailored to your unique circumstances. Together, we can navigate the intricate complexities of fraud law in Texas and work towards an efficient and favorable resolution of your case.