FRAUD AND MISREPRESENTATION

FRAUD AND MISREPRESENTATION Claims against design professionals for fraud or misrepresentation are generally considered distinct from ordinary malpractice claims involving breach of the standard of practice. They do not require proof of the standard of practice and violation of the standard of practice, but rather have their own independent elements as follows: a. a misrepresentation or omission of an important fact; b. the misrepresentation or omission was made negligently, innocently, or intentionally; c. the claimant reasonably relied upon the misrepresentation or omission; and d.the claimant suffered damages as a proximate result of the misrepresentation or omission. Frequently claimants will assert misrepresentation or omission allegations against design professionals relating to errors or omissions in specifications, or in statements made to the contractors in the course of the bidding process or construction or administration of the contract. In such cases, the third party may not be able to establish the necessary element of reasonable reliance where the design professional’s duty is owed to the owner, not the third party. Claims for misrepresentation often require a higher level of proof, i.e., proof by clear and convincing evidence. Misrepresentation claims by third parties may be allowed even where professional liability claims based on breach of contract are not, because they are considered to be a distinct type of claim.