Misrepresentation Claims in Texas
When someone lies to you in a business deal, it can cost your company serious money. Maybe a partner gave you fake sales numbers or a vendor hid problems with their products. These lies are called misrepresentation, and they can damage your business. Texas law lets you fight back when false statements hurt your company, but you need an experienced lawyer to prove your case.
The Houston business attorneys at Roger G. Jain & Associates, P.C. have helped companies recover money lost because of lies and misleading statements for over 30 years. We handle cases involving contract disputes, partnership disagreements, real estate transactions, and commercial deals gone wrong. If another party’s false statements have harmed your business, we’ll fight to hold them accountable and recover your damages. Learn more about our firm by calling us at 713-981-0600.
Our office is located at 9301 Southwest Freeway, Suite 250, Houston, TX 77074. We’re situated in the Braeburn Glen neighborhood, right off Highway 59 between Gessner Road and Bissonnet Street, serving clients throughout southwest Houston.
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Understanding Misrepresentation Under Texas Law
Misrepresentation happens when someone makes a false statement that causes you to lose money. You believed what they said, made a business decision based on it, and got hurt financially. Texas recognizes three types of misrepresentation. Each one works differently and has different rules.
- Fraudulent misrepresentation
- Negligent misrepresentation
- Innocent misrepresentation
When someone lies to you on purpose and you suffer real damages, the courts consider it to be fraudulent misrepresentation. They wanted you to believe the lie so you would make a decision that benefits them, and you lost money because of it. These cases often involve fake documents, hidden debts, or lies about how well a business is doing.
In cases of negligent misrepresentation, someone gives you wrong information because they were careless. They didn’t lie on purpose, but they didn’t check their facts when they should have. Common examples include accountants who give you bad financial reports, real estate brokers who tell you the wrong property value, or business consultants who give poor advice without doing their homework.
In innocent misrepresentation, the speaker genuinely believes the information is true; however, it turns out to be incorrect. Texas law offers fewer options for innocent misrepresentation. Usually, you can cancel the contract and get back what you lost, but you can’t get additional money.
Elements You Must Prove in a Misrepresentation Case
Texas courts require specific elements to establish a misrepresentation claim. You must prove that the defendant made a material representation to you. The representation must involve a statement of fact, not mere opinion or future predictions. Statements like “this is the best investment you’ll ever make” typically don’t qualify, while “this property generates $50,000 in monthly rental income” does.
The statement must be false when made. You’ll need evidence showing the actual facts differed from what was represented. Documents, financial records, inspection reports, and expert testimony often prove the falsity of statements.
For fraudulent misrepresentation, you must show that the person knew they were lying or didn’t care if it was true. Emails, company documents, and proof that they knew the truth before your deal can help prove they lied on purpose.
For negligent misrepresentation, you must prove the person was careless when they got the information or when they told it to you. You must have actually relied on the false statement in making your business decision. If you conducted independent due diligence that would have revealed the truth, or if other factors primarily drove your decision, you may struggle to prove reliance. Your reliance must also be justifiable under the circumstances.
Finally, you must show that the lie directly caused you to lose money. Figuring out how much you lost requires a detailed look at your finances. This includes money you lost, profits you didn’t make, or how much your business value dropped because of the false statements.
Damages Available in Misrepresentation Cases
Texas law provides various remedies depending on the type of misrepresentation. In fraud cases, you can recover actual damages representing your out-of-pocket losses. Courts calculate this as the difference between the value you received and the value you gave up, plus any additional consequential damages you suffered.
Fraudulent misrepresentation also allows recovery of exemplary damages, which Texas law limits to the greater of $200,000 or twice the economic damages plus non-economic damages up to $750,000. These punitive damages punish intentional wrongdoing and deter future fraud.
Negligent misrepresentation typically limits recovery to actual economic damages. You can recover the money you lost, but you cannot obtain punitive damages. The measure of damages focuses on restoring you to the position you occupied before the misrepresentation.
Business Litigation Law Firm Serving Harris County and Surrounding Areas
Roger G. Jain & Associates, P.C. has over 30 years of experience handling complex business litigation in Houston and throughout Texas. We understand how to present misrepresentation claims effectively to judges and juries. Our trial experience means we’re prepared to take your case to court when settlement negotiations fail.
Call 713-981-0600 or fill out our confidential contact form to schedule a risk-free, no-obligation consultation. We’ll review your situation, explain your legal options, and help you determine the best path forward to protect your business and recover your losses.