Is a contract still legally binding if it can be proven it was signed under false pretenses.

UPDATED: Oct 9, 2013

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Is a contract still legally binding if it can be proven it was signed under false pretenses.

I entered in to a contract stating; “Insurance will pay a portion if not all of the fee”. When, in fact, it was established there were not any Insurance companies they were a provider for at the time. We were given assurances all along not to worry. We were not asked to pay first, then get reimbursed from our insurance. Our insurance will not pay now due to late claim, and know we are asked to pay in full. They never intended to get paid by insurance. They just played along until it was back on us to pay. Therefore, I feel the contract is null and void. Is that a true statement?

Asked on October 9, 2013 under Business Law, California


Nathan Wagner / Law Office of Nathan Wagner

Answered 9 years ago | Contributor

You are correct that you can rescind a contract if the other side never intended to honor the contract. However, the fact that they never got the insurance does not necessarily mean that they never intended to get the insurance. This may have been a breach of contract rather than fraudulent inducement to enter a contract. You should contact a local business attorney about your situation. That attorney will need to read the entire contract and hear the whole story before they can advise you. 

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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