COMMON-LAW FRAUD IN CONSTRUCTION SITUATIONS: ALIVE AND KICKING IN THE STATE OF TEXAS

1. THE BASICS OF COMMON-LAW FRAUD
   1. The Six Elements of Actionable Fraud
      1. A material representation was made
      2. That is was false
      3. That when the speaker made it he knew that it was false or made it recklessly without any knowledge of the truth and as a positive assertion
      4. That the speaker made the representation with the intention that it should be acted upon by the other party
      5. That the other party indeed acted in reliance upon the representation
      6. That the other party thereby suffered injury
   2. Fraud's Basic Effects on Contracts
2. SILENCE AS ACTIONABLE FRAUD
3. THE BASICS OF FRAUD IN THE INDUCEMENT
   1. The Five Elements of Fraud in the Inducement
   2. Important Issues regarding Fraud in the Inducement
   3. The Effect of Fraud in the Inducement on the Contract
4. OTHER CHARACTERISTICS OF COMMON-LAW FRAUD CLAIMS
   1. No Privity Required
   2. No Attorney's Fees
5. WHY CLAIM FRAUD?: DAMAGES AVAILABLE FOR COMMON-LAW FRAUD
   1. The Two Measures for Computing Acutal Damages: "Out-of-Pocket" or "Benefit-of-the-Bargain"
      1. "Out-of-Pocket"
      2. "Benefit-of-the-Bargain"
   2. Exemplary Damages: The Plaintiff's Jackpot and the Defendant's Nightmare
      1. The Major Factors in Determining the Availability of Exemplary Damages
      2. Proving Actual Damages is a Prerequisite
      3. Proportionality
      4. Fraudulent Inducement as Conscious Indifference
      5. Bifurcation of Punitive Damages Claim
6. RELATED CAUSE OF ACTION: THE RCLA
7. SUMMARY - FIVE TEXAS CASES UPHOLDING FRAUD FINDINGS IN THE CONSTRUCTION CONTEXT

1. Formosa Plastics Corp. v. Presidio Engineers and Contractors, 41 Tex. Sup. Ct. J. 289 (Tex.)
2. Hoechst Celeanese Corp. v. Arthur Bros., 882 S.W.2d 917 (Tex.App.--Corpus Christi 1994, writ denied)
3. Peco Constr. Co. v. Guajardo, 919 S.W.2d 736 (Tex.App.--San Antonio 1996, writ denied)
4. S.W. Underground Supply v. Amerivac, Inc., 894 S.W.2d 15 (Tex.App.--Houston [14th Dist.] 1994, writ denied)
5. Holberg v. Teal Construction Co., 879 S.W.2d 358 (Tex.App.--Houston [14th Dist.] 1994, no writ)

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