California Civil Jury Instructions (CACI)
335. Affirmative Defense—Fraud
[Name of defendant] claims that no contract was created because [his/ her/its] consent was obtained by fraud. To succeed, [name of defendant] must prove all of the following:
1. That [name of plaintiff] represented that [insert alleged fraudulent statement];
2. That [name of plaintiff] knew that the representation was not true;
3. That [name of plaintiff] made the representation to persuade
[name of defendant] to agree to the contract;
4. That [name of defendant] reasonably relied on this representation; and
5. That [name of defendant] would not have entered into the contract if [he/she/it] had known that the representation was not true.
If you decide that [name of defendant] has proved all of the above, then no contract was created.
New September 2003
Directions for Use
This instruction covers intentional misrepresentation under the first alternative presented in Civil Code section 1572. The other types of fraud that are set forth in section 1572 are negligent misrepresentation, concealment of a material fact, and false promise.
If the case involves an alleged negligent misrepresentation, substitute the following for element 2: “That [name of plaintiff] had no reasonable grounds for believing the representation was true.”
If the case involves concealment, the following may be substituted for element 1: “That [name of plaintiff] intentionally concealed an important fact from [name of defendant], creating a false representation.” See CACI No. 1901, Concealment, for alternative ways of proving this element.
If the case involves a false promise, substitute the following for element 1: “That [name of plaintiff] made a promise that [he/she/it] did not intend to perform” and insert the word “promise” in place of the word “representation” throughout the remainder of the instruction.
Sources and Authority
- The Civil Code provides that consent is not free when obtained through duress, menace, fraud, undue influence, or mistake, and is deemed to have been so obtained when it would not have been given but for such fraud or mistake. (Civ. Code, §§ 1567, 1568.)
- Civil Code section 1572 provides:
Actual fraud, within the meaning of this Chapter, consists in any of the following acts, committed by a party to the contract, or with his connivance, with intent to deceive another party thereto, or to induce him to enter into the contract:
1. The suggestion, as a fact, of that which is not true, by one who does not believe it to be true;
2. The positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true;
3. The suppression of that which is true, by one having knowledge or belief of the fact;
4. A promise made without any intention of performing it; or, 5. Any other act fitted to deceive.
- Fraud can be found in making a misstatement of fact, as well as in the concealment of a fact: “Actual fraud involves conscious misrepresentation, or concealment, or non-disclosure of a material fact which induces the innocent party to enter the contract.” (Odorizzi v. Bloomfield School Dist. (1966) 246 Cal.App.2d 123, 128 [54 Cal.Rptr. 533].)
- Fraud may be asserted as an affirmative defense: “One who has been induced to enter into a contract by false and fraudulent representations may rescind the contract; or he may affirm it, keeping what he has received under it, and maintain an action to recover damages he has sustained by reason of the fraud; or he may set up such damages as a complete or partial defense if sued on the contract by the other party.” (Grady v. Easley (1941) 45 Cal.App.2d 632, 642 [114 P.2d 635].)
- “It is well established that a defrauded defendant may set up the fraud as a defense and, in fact, may even recoup his damages by counterclaim in an action brought by the guilty party to the contract. The right to avoid for fraud, however, is lost if the injured party, after acquiring knowledge of the fraud, manifests an intention to affirm the contract.” (Bowmer v. H. C. Louis, Inc. (1966) 243 Cal.App.2d 501, 503 [52 Cal.Rptr. 436], internal citations omitted.)
1 Witkin, Summary of California Law (10th ed. 2005) Contracts, §§ 285–308
17 California Forms of Pleading and Practice, Ch. 215, Duress, Menace, Fraud, Undue Influence, and Mistake, §§ 215.70–215.72, 215.144 (Matthew Bender)
9 California Points and Authorities, Ch. 92, Duress, Menace, Fraud, Undue Influence, and Mistake, § 92.40 et seq. (Matthew Bender)
27 California Legal Forms, Ch. 77, Discharge of Obligations, § 77.353 (Matthew Bender)
1 Matthew Bender Practice Guide: California Contract Litigation, Ch. 8, Seeking or Opposing Equitable Remedies in Contract Actions, 8.24
1 Matthew Bender Practice Guide: California Contract Litigation, Ch. 17, Attacking or Defending Existence of Contract—Fraud, Duress, Menace, and Undue Influence, 17.03–17.09, 17.12–17.18