law-fraudulent inducement | as-is language in contract, disclaimer as to reliance | merger integration clause |
fraud | fraudulent concealment |

FRAUDULENT INDUCEMENT CAUSE OF ACTION

To establish fraud, a claimant must prove:  (1) that a material representation was made; (2) that the
representation was false; (3) that, when the speaker made the representation, he knew it was false or
made it recklessly without knowledge of the truth as a positive assertion; (4) that the speaker made it
with the intention that it should be acted upon by the claimant; (5) that the claimant acted in reliance upon
it; and (6) that the claimant thereby suffered injury.  Johnson & Higgins of Tex., Inc. v. Kenneco Energy,
Inc., 962 S.W.2d 507, 524 (Tex. 1998).  

Fraudulent inducement is a particular species of fraud that arises only in the context of a contract and
requires the existence of a contract as part of its proof.  Haase v. Glazner, 62 S.W.3d 795, 798 (Tex.
2001).

No viable fraudulent inducement claim the absence of a contract

A fraudulent inducement claim arises solely in the context of a contract and requires the existence of a contract as
part of its proof. Haase v. Glazner, 62 S.W.3d 795, 798 (Tex. 2001). The issue of whether a contract was induced
by fraud is a dispute involving the parties’ agreement. In re J.D. Edwards World Solutions Co., 87 S.W.3d 546,
550 (Tex. 2002).

RECENT TEXAS SUPREME COURT OPINIONS ON FRAUDULENT INDUCEMENT

Forest Oil Corp v. McAllen, No. 06-0178 (Tex. Aug. 29, 2008)(Willett)(arbitration, commercial contact, fraudulent
inducement claim barred by contractual waiver of reliance language)
Chief Justice
Jefferson delivered a dissenting opinion, in which Justice Medina joined.


COURT OF APPEALS CASES IN WHICH THE SUPREME COURT DENIED REVIEW

09-0466          
EVERT MCDOUGAL AND M & P CONSTRUCTION CO., INC. v. ROGER D. STEVENS; from Bandera County;
4th district (
04-07-00814-CV, ___ SW3d ___, 01-30-09, pet. denied July 2009)
(
fraudulent inducement claim, as-is language in contract, waiver of reliance)

08-0510          
BIOSILK SPA, L.P., F.K.A. ONE MARENGO, L.P. v. HG SHOPPING CENTERS, L.P.; from Harris County; 14th
district (14-06-00986-CV, ___ SW3d ___, 05-08-08, pet. denied Sep. 2008) (fraud, fraudulent inducement,
negligent misrepresentation, and promissory estoppel, no reasonable reliance)

08-0701          
ALLEN WALKER v. TRB BANCORP, INC.; from Collin County; 5th district (
05-07-00901-CV, ___ SW3d ___,
07‑15‑08, pet. denied Oct 2008)(breach of contract, limitations, fraudulent inducement)
fraud and fraudulent inducement. The elements of fraud are a material misrepresentation that was false, that was
either known to be false when made or was made without knowledge of its truth, that was intended to be acted
upon, that was relied upon, and that caused injury. Sears, Roebuck & Co. v. Meadows, 877 S.W.2d 281, 282
(Tex. 1994) (per curiam). Fraudulent inducement is merely a particular species of fraud that arises only in the
context of a contract and requires the existence of a contract as part of its proof. Haase v. Glazner, 62 S.W.3d
795, 798 (Tex. 2001). Thus, a fraudulent-inducement claim has the same elements as a fraud claim, plus the
added element that the fraud related to an agreement between the parties. Id. at 798-99. TRB asserted in its
motion that Walker could adduce no evidence that TRB made any representations with knowledge of their falsity
or recklessly as to their truth, no evidence that TRB possessed the intent to induce reliance, and no evidence of
damages. The trial court did not specify the basis for its dismissal of Walker's claims for fraud and fraudulent
inducement.
Walker relies on the representation that he would be repaid his organizer's expenses as the false representation
that gives rise to his claims for fraud and fraudulent inducement. This is a promise of future performance. Such
promises will support a fraud claim only if the promise was made with no intention of performing the act. T.O.
Stanley Boot Co., Inc. v. Bank of El Paso, 847 S.W.2d 218, 222 (Tex. 1992); Spoljaric v. Percival Tours, Inc., 708
S.W.2d 432, 434 (Tex. 1986). Evidence of the promisor's failure to perform, standing alone, is no evidence of the
promisor's intent not to perform when the promise was made. Spoljaric, 708 S.W.2d at 435. Walker cites no
evidence beyond the fact of TRB's nonperformance to support the existence of fraudulent intent at the time the
contract was executed. Accordingly, he did not raise a genuine fact issue as to the essential element of fraudulent
intent.
The trial court correctly granted summary judgment in favor of TRB as to Walker's claims for fraud and fraudulent
inducement.



Also see:
Texas Causes of Action  |  2011 Texas Supreme Court Opinions | 2011 Tex Sup Ct Per Curiams   
Texas Caselaw Topics Pages | Texas Opinions homepage |