What constitutesfraudulent business practices?

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What constitutesfraudulent business practices?

My boss has 2 businesses that he runs together. Sometimes people call both companys to get competitive quotes. He will send me to write a quote from 1 company, then he will go out as the other company and give a much higher quote for the same work, same crew. But the quote could be as much as $400 to $8000 higher assuring that he will get the job.

Asked on February 7, 2011 under Business Law, Wisconsin

Answers:

S.L,. Member, California Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Fraud is the misrepresentation of a material fact made with knowledge of its falsity and with the intent to induce reliance on which the other party justifiably relies to his/her detriment.

Fraud also includes nondisclosure of a material fact such as your boss not disclosing that he has two businesses which are submitting quotes.

The fraud occurring here is providing the quotes from the two businesses without disclosing that the same individual owns both businesses in order to induce reliance on the other party by one quote being substantially higher than the other.  The other party justifiably relies to their detriment on the lower quote.

Damages (monetary compensation) in a lawsuit for fraud would be either benefit of the bargain (the difference between what the party paid and what the party should have paid) or out-of-pocket loss.

 

 


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