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What is the difference between fraud and a breach of contract?

On Behalf of | Aug 18, 2021 | Uncategorized

Let’s say that your business has invested a lot of money into the services provided by another company. You have signed a contract outlining the expectations between your two companies.

After you have made payments to the company according to your end of the contract, the contracted company doesn’t deliver the expected results. Is this a case of a breach of contract or of fraud?

Breach of contract

The answer is simple in the case of a breach of contract. The first thing to ask is if your company delivered on your end. The next thing to evaluate is if the company you contracted fulfilled their contract requirements.

A breach of contract occurs when a company fails to fulfil their contracted responsibilities. If your company pays theirs and they don’t deliver a product or service as is required, a breach of contract has occurred.

Fraudulent contract

Fraud involves a deliberate effort to deceive one party. This can be more than just a failure to deliver services. Fraudulent contracts may have hidden pages, undisclosed insurance charges, or attorney fees that were not discussed nor agreed to by the other party.

However, it can be difficult to provide all the necessary information to prove a fraud case. Extensive details about the interaction between businesses is required. Facts about what each party expected from the contractual agreement is required. How the concealment of additional charges or the deception occurred are necessary to prove a fraud case in court.

Despite the difficulty in providing all the details of the association between parties, evidence does not need to be unassailable to convict actions of fraud. Instead, evidence provided which can be led to sufficiently infer a reasonable inference of misconduct is sufficient to convict.