If you have a business in Arizona, you may encounter disputes when parties allege fraud and misrepresentation. Whether you are being accused of making misrepresentations or are experiencing losses because of another’s fraudulent acts, we are experienced with business fraud litigation in Phoenix.

State law dissuades disgruntled competitors, business partners, and shareholders from making frivolous or retaliatory fraud accusations because, from the first notice pleading, the potential plaintiff must specifically identify all elements of the fraud taking place. Our commercial litigation attorneys understand how to pursue an early dismissal for unsubstantiated fraud complaints, as well as how to recover monetary awards for clients who have been defrauded.

Examples of Business Fraud in Phoenix

Fraud can occur in business transactions when one party knowingly makes a false statement to entice another party into an agreement, and the hearer enters the agreement reasonably relying on the misrepresentation as true. This situation can give rise to a claim for fraudulent inducement or promissory fraud. An example could be fraudulent misrepresentations in contracts and business negotiations to induce a merger or acquisition.

Other examples of business fraud could include the following:

  • Misappropriation of a business’s assets, such as forging checks or falsifying time sheets;
  • Corruption, such as bribing an accountant to manipulate a company’s books and entice investors; or
  • Securities fraud when public companies fail to disclose material, negative information in Securities and Exchange Commission filings.

Remember, plaintiffs cannot just allege they were defrauded; they must allege it with particular details, and then prove it.

Elements of Business Fraud

Our Phoenix lawyers break down each case to ensure all elements of business fraud can be proven in litigation.

False and Material Representations

Representations can be oral or written, and can even be information that is intentionally concealed or omitted. To be actionable, a representation must be a representation of a material fact. For example, if a party that is being acquired in a business merger significantly inflates the company’s balance sheets to command a higher price, a false and material representation has been made. But if the acquired party states the company has been in business for 15 years instead of 14 years, absent unique circumstance, the misrepresentation is likely not “material,” and is, thus, probably not actionable in fraud.

Knowledge and Intent

During fraud litigation, plaintiffs also must prove the defendants knew their representations were false, and made them anyway with the intent that the plaintiffs rely on the false information. Circumstantial evidence is often used to prove this element since it is typically impossible to know what someone is thinking at the time they made a fraudulent claim.

Justified Reliance on a Falsity

Plaintiffs also must show that they did not know the misrepresentation was untrue, and justifiably relied on it as fact. No business associate justifiably relies on a representation they know to be false and then proceeds to suffer losses because of it. Discovering the representation is untrue after experiencing financial losses is the basis for a business fraud lawsuit. Plaintiffs must also show they were not willfully ignorant by relying on the defendants’ claims when the claims were obviously false or unreliable. Sales and advertising pose specific challenges here: in many cases, relying on hyperbolic advertising claims is not justifiable for purposes of a fraud claim. In other cases, however, where a specific, factual representation was falsely conveyed about a product, a fraud case may be appropriate.


For a claim to qualify as business fraud, provable, quantifiable damages must result from the misrepresentations. These damages can include losses relating to the company’s reputation or ability to continue in business.

Our Phoenix Business Fraud Litigation Attorneys Protect Your Interests

Whether you rely on relationships with partners, shareholders, vendors, or employees who have defrauded you, or you are accused of committing fraud in your dealings, you must prove every component of your claim in court. We understand that litigation is an unwelcome interruption in your business day, but it is critical to stop others from acting in bad faith and keep your business on track.

Our corporate litigators can apply their vast resources, knowledge, and experience to protect your rights throughout business fraud litigation in Phoenix. Call Giles Law now to find out what we can do for you and your business.

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