law-fraud-statutory  | common law fraud cause of action |  | fraud | fraud vs breach of contract | statutory fraud |
fraud in real estate transactions |
fraudulent inducement of contract | fraudulent concealment of tort or breach
as limitations tolling theory | fraudulent misrepresentation | negligent misrepresentation | breach of contract vs.
fraud claim | Deceptive Trade Practices (DTPA) claim |

Violation of Business & Commerce Code (statutory fraud)

In point of error five, Kapur contends that the trial court erred in rendering summary judgment on his statutory
fraud claim based on section 27.01 of the Business and Commerce Code.

Section 27.01 provides:

(a) Fraud in a transaction involving real estate or stock in a corporation or joint stock company consists of a

(1) false representation of a past or existing material fact, when the false representation is
(A) made to a person for the purpose of inducing that person to enter into a contract; and
(B) relied on by that person in entering into that contract; or

(2) false promise to do an act, when the false promise is
(A) material;
(B) made with the intention of not fulfilling it;
(C) made to a person for the purpose of inducing that person to enter into a contract; and
(D) relied on by that person in entering into that contract.

(b) A person who makes a false representation or false promise commits the fraud described in Subsection (a)
of this section and is liable to the person defrauded for actual damages.

(c) A person who makes a false representation or false promise with actual awareness of the falsity thereof
commits the fraud described in Subsection (a) of this section and is liable to the person defrauded for exemplary
damages. Actual awareness may be inferred where objective manifestations indicate that a person acted with
actual awareness.

(d) A person who (1) has actual awareness of the falsity of a representation or promise made by another person
and (2) fails to disclose the falsity of the representation or promise to the person defrauded, and (3) benefits
from the false representation or promise commits the fraud described in Subsection (a) of this section and is
liable to the person defrauded for exemplary damages. Actual awareness may be inferred where objective
manifestations indicate that a person acted with actual awareness.

(e) Any person who violates the provisions of this section shall be liable to the person defrauded for reasonable
and necessary attorney's fees, expert witness fees, costs for copies of depositions, and costs of court.

Tex. Bus. & Com. Code Ann. § 27.01 (Vernon 2002).

As Kapur points out, neither Goldstein nor Cothran specifically addressed this claim in their motions for
summary judgment. On appeal, both contend that section 21.07 is strictly limited to transactions involving the
transfer of real estate, stock in a corporation, or stock in a joint stock company. See Greenway Bank & Trust v.
Smith, 679 S.W.2d 592, 596-97 (Tex. App.--Houston [1st Dist.] 1984, writ ref'd n.r.e.). Kapur's affidavit does not
provide sufficient information from which the trial court, or this court, could discern the exact nature of the
transaction or whether it is of a type governed by this statute , despite his description of the venture as an oil
and gas securities project and his purchase of 30 "units."

We overrule point of error five.

We affirm the trial court's summary judgments.  
01-02-00023-CV

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