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Be careful what you say during contract negotiations or at signings in CA

The California Supreme Court extended litigation risks when Selling, negotiating, inducing someone to sign an agreement with you prior to or atthe time of signing can now lead to litigation.  A new sequence of cases makes it easier to litigation fraudulent inducement cases.

Most contracts contain a provision that generally states the contract contains all terms and conditions and nothing verbally represented prior to or concurrently with the execution of the agreement will modify the agreement. Our Carlsbad litigation team has reviewed the 2013 case entitled Riverisland Cold Storage, Inc. v. Fresno-Madera Production Credit Ass’n 55 Cal. 4th 1169, a California Supreme Court case, which greatly weakened the standard contract phrase. The Supreme Court held in Riverisland that a representation of anticipated terms to be included in a contract or of the nature of the contract with an intent to induce a person to sign and agree to the contract is actionable. This decision, along with subsequent cases, makes it much easier to maintain a case of fraudulent inducement for contract matters. Our contract attorneys can assist you with reviewing or drafting provisions in your contracts, leases, loan documents, purchase and sale agreements. These cases affect a broad range of contractual matters.