Understanding Intent to Deceive

In order for an allegation of fraudulent misrepresentation to be sustained there must be an intent to deceive on behalf of the accused party. The element of intent also requires that the deceiver must know that the information they are spreading is false or that the withholding of the information would constitute a fraudulent action.

The technical term for this intent to do wrong is known as scienter. Scienter is related etymologically to the word science. Both words refer to the possession of knowledge.

Laws concerned with fraud in contracts may find that scienter exists if one of the parties to the contract knows that one of the material facts that affect the contract in question is not true as they are stated in the contract.

Scienter is also determined by laws governing contracts to exist if one of the parties to the contract makes statements without any regard to whether the statements they utter are true or false. Laws regard this willful ignorance of the validity of the individual’s statements to rise to the level of fraudulent representation.

Scienter may also be found to exist if the party accused has claimed that their statements are based on personal knowledge or research when this knowledge or research has no actual basis in reality.

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