Legal Memorandum: Cause of Action for Promissory Fraud in CA

Issue: What elements are necessary to assert a cause of action for promissory fraud in California?

Area of Law: Business Organizations & Contracts
Keywords: Promissory fraud; Cause of action; Promise
Jurisdiction: California
Cited Cases: 76 P.2d 503; 12 Cal. 4th 631; 21 Cal. App. 3d 541; 267 Cal. App. 2d 672; 32 Cal. 2d 480; 10 Cal. 2d 671; 909 P.2d 981
Cited Statutes: Cal. Civ. Code § 1709; Restatement (Second) of Torts § 530, subd. (1); Cal. Civ. Code, § 1710, subd. (4)
Date: 05/01/2008

A cause of action for promissory fraud requires both (1) a promise and (2) nonperformance of that promise.  See, e.g., Bondi v. Jewels by Edwar, Ltd. (1968) 267 Cal. App. 2d 672, 677, 73 Cal. Rptr. 494.   And it does not matter if a party rendered partial performance; such initial conduct by a party does not negate the plaintiff’s claim, as demonstrated in Lazar v. Superior Court (1996) 12 Cal. 4th 631, 909 P.2d 981, 49 Cal. Rptr. 2d 377. 

In the Lazar case, the court explained that “[t]he elements of fraud, which give rise to the tort action for deceit, are (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.”  Id., 12 Cal. 4th at 638 (citing, inter alia, 5 Witkin, Summary of Cal. Law (9th ed. 1988), Torts § 676, at 778; Cal. Civ. Code § 1709).  “Promissory fraud” is a subspecies of an action for fraud and deceit.  A promise to do something necessarily implies the intention to perform; thus, when a promise is made without such intention, there is an implied misrepresentation of fact that may constitute actionable fraud.  Id. (citing Union Flower Market, Ltd. v. So. Cal. Flower Market, Inc. (1938) 10 Cal. 2d 671, 676, 76 P.2d 503; Cal. Civ. Code, § 1710, subd. (4); 5 […]

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