Can a contract be voided for inducement to fraud?

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Can a contract be voided for inducement to fraud?

I select a contractor based on his ability to deliver a completed home before school year started; he gave an expressed timeframe. It is still under construction. The contract has provisions stating they are not responsible for spoken time commitments. The builder has fired the site manager. I have emails stating the expectations and a letter from a regional manager stating a delivery date. None were met. Can I take them to arbitration and seek contract void and damages?

Asked on January 10, 2012 under Real Estate Law, Tennessee

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

A contract can be voided if it is induced by fraud, or material misrepresentations as to what would be done. However, from what you write, there is a written term in the contract disclaiming responsibility for at least some time committments. If it is the case that the contract, by its very terms, prevents you from holding them liable for delays, then you would not have a claim or case, unless you can show the most extreme situation--e.g. not that the home will simply be late, but that it won't be completed at all. Generally, since people are required to review contracts before signing them, if you signed something limiting liabilty, that limitation is enforceable.

On the other hand, if there is no provision in the contract preventing them from being held liable for dates/time frames as expressed in the emails and letter you refer to, then you may in fact be able to take legal action against them, seeking some combination of recission, termination, and/or compensation. Given how much is at stake--presumably several tens of thousands of dollars at least--rather than try to take action yourself, retain an attorney to help you; the first step will be letting the lawyer review the specific language of the contract and of all time-related representations, to evaluate whether you do have a cause of action and, if so, the remedies to which you may be entitled.


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