Can a family member trick you into signing a legal form and it still be valid?
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Can a family member trick you into signing a legal form and it still be valid?
I was tricked into signing over my shares of a business. I needed money for household expenses so my grandfather said that he would send me a form that would relaese money that was put into a trust over to me 1 year early. I trusted him and he later told me that I signed my shares of the business over to him. He tricked me. I trusted him in good faith and he tricked me into signing over my shares of the company. Can he do that by law? TNot to mention I haven’t seen any profits from the company in all the years I owned my 12%?
Asked on December 14, 2010 under Business Law, New Jersey
Answers:
S.L,. Member, California Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
The form you signed is not valid. You could sue your grandfather for fraud. Fraud is the misrepresentation of a material fact made with knowledge of its falsity and with the intent to induce your reliance. You justifiably relied to your detriment.
Fraud in the inducement would be a defense to enforcement of the agreement. Fraud in the inducement means you were tricked into signing the document by which your shares were turned over to your grandfather. Your damages (the amount you are seeking to recover) would be your out-of-pocket loss which would be the value of the shares including any increase in value of the shares while your grandfather owns the shares. If your grandfather sold the shares, you could trace the funds he received and recover those funds or any assets he purchased with the funds.
Another remedy to pursue would be constructive trust. This means that your grandfather is wrongfully holding the shares and a constructive trust would require him to return the shares to you.
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