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

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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

Answers:

Nathan Wagner / Law Office of Nathan Wagner

Answered 8 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. 


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