Even when everything goes smoothly, there is no question that running a business is very difficult. As a business owner, you have to prepare for any possible situation—and that includes fraud and negligent misrepresentation. These two acts are much more common than many business owners might think, until they find themselves facing a very difficult situation. Below are the most common types of fraud business owners run into commonly. If you face any of them when trying to run your business, Beth Santilli Law, LLC can help. Request a consultation with one of our experienced business fraud attorneys in Mt. Pleasant, SC today.

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Negligent Misrepresentation

Negligent misrepresentation occurs when someone makes a statement that is false in order to get the other party to agree to the terms of a contract. Negligence is not an intentional act but a failure to take reasonable steps to ensure that statements of fact concerning the contract are true.

Negligent misrepresentation involves businesses claiming to provide necessary skills without the ability to meet their promises on the back end. The at fault company is careless in how they represent their products or services. In a negligent misrepresentation case, the business or individual making the false statements knew, or should have known, that the statements were false. Misrepresentation is not as intentional as fraud. However, making false statements when creating a contract is actionable under South Carolina contract law, and anyone that suffers a loss as a result can file a claim for compensation.

Civil Fraud

Civil fraud commonly involves contracts as well, but it is much more serious than negligent misrepresentation. When a business or individual commits civil fraud, they willfully and intentionally make untrue statements in order to persuade the other party to enter into an agreement. They purposefully provide information that is false with the intent to deceive and harm another company or person.

Civil fraud can also involve purposely withholding information so the other party will sign a contract. To prosecute a civil fraud case, the plaintiff carries the burden of proof and must show that he or she justifiably relied on the falsity, did not know any better, and was damaged by the falsity.


Parties that are harmed through negligent misrepresentation or fraud can often file a civil lawsuit to claim any damages they suffered as a result. Sometimes, contracts include clauses that require the two parties to arbitrate the dispute rather than undergo litigation. However, both arbitration and litigation can allow the harmed party to hold the negligent or fraudulent party liable. Possible damages could include:

– Actual damages equal to the benefit the wronged party would have received if there had been no misrepresentation or fraud
– Consequential damages, which are damages that naturally flow from the misrepresentation or fraud
– Punitive damages meant to punish the fraudulent party for their actions
– Specific performance damages that require one party to fulfill their obligations which is very rare
– Rescission of the contract, which essentially nullifies the agreement
– Attorneys’ fees and court cost by contract or statute

Anyone that wishes to pursue litigation for negligent misrepresentation or fraud should speak to a business fraud attorney who can help with their case. Beth Santilli Law is here to help with your case.

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Fraud can do great harm to any business, which is why it is so important for business owners to know what actions they can take when it occurs. At Beth Santilli Law, LLC, our Mt. Pleasant, SC business fraud attorneys can help you understand your rights and options in these cases. Our attorneys can advise on your case, help you create policies and employment handbooks that will help reduce fraud, and advise on the steps to take when fraud or negligent misrepresentation does occur. Contact us today to request a consultation.

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