Legal Definitions - fraudulent sale

A fraudulent sale refers to a transaction where one party intentionally uses deceit, misrepresentation, or the concealment of crucial information to persuade another party to buy or sell goods, services, or property. The deception must be material (significant enough to influence the decision), made with the intent to mislead, and must actually cause the other party to rely on the false information, resulting in some form of harm or loss.

Here are some examples illustrating a fraudulent sale:

• Example 1: Misrepresenting a Vehicle's Condition

  A used car dealership advertises a luxury SUV as having "low mileage and no accident history," providing a seemingly clean vehicle history report. However, the dealership intentionally tampered with the odometer to roll back the mileage and concealed evidence of a major structural repair from a previous severe collision. A buyer, relying on these false claims and the doctored report, purchases the vehicle at a premium price. Soon after, the buyer discovers significant underlying mechanical issues and structural damage that would have drastically reduced the car's value and safety had they known the truth.

  This illustrates a fraudulent sale because the dealership made deliberate false statements and concealed material facts (mileage and accident history) with the intent to deceive the buyer, who relied on this misinformation to make the purchase, resulting in financial loss and a dangerous vehicle.

• Example 2: Selling Counterfeit Goods as Authentic

  An online vendor sells what they claim are "authentic designer handbags" from a renowned luxury brand, complete with fake authenticity cards and packaging. The vendor charges prices comparable to genuine articles. Customers purchase these bags believing they are acquiring genuine luxury items. In reality, the bags are high-quality counterfeits manufactured with cheaper materials and labor, worth only a fraction of the price paid.

  This is a fraudulent sale because the vendor intentionally misrepresented the authenticity and origin of the goods, using deceptive labeling and pricing to trick buyers into believing they were purchasing genuine luxury items, thereby defrauding them of the difference in value.

• Example 3: Concealing Defects in Real Estate

  A homeowner sells their house, knowing that the basement has a severe, recurring mold problem due to a structural defect in the foundation that causes water leakage. Before showing the house to potential buyers, they paint over the mold, use strong air fresheners, and place rugs strategically to hide the dampness and discoloration. During negotiations, they explicitly state in writing that there are "no known water intrusion issues." A buyer purchases the home, only to discover the extensive mold and foundation problems after moving in, requiring costly repairs.

  This demonstrates a fraudulent sale because the seller actively concealed a significant defect (mold and foundation issues) and made a false statement about water intrusion, intending to deceive the buyer. The buyer relied on these misrepresentations and omissions, leading to the purchase of a defective property and subsequent financial damage.