Cal. Civ. Code §§ 1572, 1709–1710; CACI Nos. 1900, 1903
Fraud in California — and negligent misrepresentation, its lower-scienter twin
A claim in California superior courts · Last verified August 26, 2026
Fraud is the claim plaintiffs reach for when a contract claim will not carry what they need. It opens the door to punitive damages, it reaches individuals personally behind a corporation, and it carries a discovery rule written into the limitations statute.
The price is proof and pleading. California requires fraud to be alleged with particularity, and against a corporation the standard is stricter than the federal rule — you must name who spoke, their authority to speak, to whom, what they said, and when.
This page also covers negligent misrepresentation, which is the same tort with the scienter element lowered. The two belong side by side, because the choice between them is usually the whole strategic question.
What the claim is
Someone lied to you to get you to act, and you were harmed by acting on it.
Civil Code § 1710 defines deceit in four forms, and all four are pleaded regularly:
- Intentional misrepresentation — a knowingly false statement of fact.
- Negligent misrepresentation — an assertion made without reasonable ground for believing it true.
- Concealment — suppressing a fact the defendant was bound to disclose.
- False promise — a promise made with no intention of performing it.
Where the right comes from
Civil Code §§ 1572 (actual fraud in contract) and 1709–1710 (deceit).
What a plaintiff has to prove — CACI No. 1900
For intentional misrepresentation:
- The defendant represented a past or existing material fact.
- The representation was false.
- The defendant knew it was false, or made it recklessly without regard for its truth.
- The defendant intended the plaintiff to rely on it.
- The plaintiff reasonably relied.
- The plaintiff was harmed.
- The reliance was a substantial factor in causing the harm.
The representation must concern a past or existing fact. Opinion, puffery, and predictions about the future are not actionable — which is why so much of the fight is about characterising what was said.
Related instructions: CACI No. 1901 (concealment), No. 1902 (false promise), No. 1903 (negligent misrepresentation).
Negligent misrepresentation — CACI No. 1903
Identical to intentional deceit except for scienter. Instead of knowing the statement was false, the defendant made an assertion of fact without reasonable ground for believing it was true.
Two consequences follow, and they cut in opposite directions. The lower scienter makes it easier to prove. But it is more exposed to the economic loss rule (below) and it does not support punitive damages the way intentional fraud does — Civil Code § 3294 lists fraud as a basis, and negligence is not fraud.
One technical limit: an implied assertion is not enough. Negligent misrepresentation requires a positive assertion of fact.
Heightened pleading — stricter than federal
Fraud must be pleaded with particularity: how, when, where, to whom, and by what means the representation was made.
Against a corporation the standard is stricter still. A plaintiff must plead the names of the people who made the misrepresentations, their authority to speak for the corporation, to whom they spoke, what they said, and when. That is more than Federal Rule 9(b) demands, and it is the single most common reason a California fraud claim is knocked out on demurrer.
How long you have to file
Three years, under CCP § 338 — and the statute codifies the discovery rule. The claim
is not deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud.
That is unusual and valuable: most California claims get the discovery rule by judicial doctrine, and here it is in the text.
Negligent misrepresentation is less settled. It is sometimes treated as a species of deceit taking the three-year period, and sometimes characterised as ordinary negligence taking two years under CCP § 335.1. The question is open, and the safe course is to assume two.
What has to happen before you file
Nothing. No exhaustion, no notice, no agency.
Particularity is a pleading requirement, not a pre-suit gate — but it functions as one in practice, because a complaint that cannot satisfy it will not survive demurrer.
Who can be sued — and who cannot
The individuals who made the misrepresentations are personally liable. This is the point of the claim in many cases: fraud reaches the people behind a corporation, where a contract claim reaches only the entity. A corporate officer who personally made the false statement is a defendant.
Common defenses
No justifiable reliance — the plaintiff should not have believed it, or did not rely at all.
Opinion, puffery, or prediction rather than a statement of existing fact.
The economic loss rule — the most important defense here, and it has moved recently.
Where parties are in a contract and the loss is purely economic, tort claims are generally barred unless an independent duty was breached. But fraud in the inducement and affirmative intentional misrepresentation escape the rule, under Robinson Helicopter Co. v. Dana Corp. (2004) 34 Cal.4th
- Negligent misrepresentation is considerably more vulnerable to the bar.
In 2024 the California Supreme Court addressed fraudulent concealment. Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1 held that concealment claims between contracting parties may escape the economic loss rule where the elements are established independently of the contract and the conduct exposed the plaintiff to risk beyond the parties' reasonable contemplation. That is the headline development on this page.
The litigation privilege, Civil Code § 47(b), bars fraud claims premised on statements made in or about judicial proceedings.
Anti-SLAPP, under CCP § 425.16, where the alleged misrepresentation was petitioning activity or speech on a public issue. That brings a mandatory fee award to a prevailing defendant, an automatic discovery stay, and immediate appealability — and a motion may target individual allegations within a mixed cause of action rather than the whole claim.
The parol evidence rule, though narrowed: the California Supreme Court restored the fraud exception in 2013, overruling a long-standing limitation that had barred evidence of promises contradicting the written agreement.
What the claim pays
Out-of-pocket damages — the difference between what was given and what was received — or, in some circumstances, benefit-of-the-bargain damages.
Punitive damages. Fraud is an enumerated basis under Civil Code § 3294, so a plaintiff who proves it by clear and convincing evidence may reach oppression, fraud, or malice damages. Section 3295 bars pretrial discovery of the defendant's financial condition without a court order.
Emotional distress damages in appropriate cases.
No fee-shifting unless a contract or another statute supplies it.
Jury trial: yes.
What people get wrong
"Fraud covers any broken promise." No. Promissory fraud requires intent not to perform at the time the promise was made — proving the defendant changed their mind later is not fraud.
"I can plead fraud generally and get to discovery." Not in California, and especially not against a corporation. Name who said it, their authority, to whom, what, and when.
"Punitive damages is a cause of action." It is a remedy.
"They said the business was a great investment." Opinion and prediction are not actionable statements of fact.
"Negligent misrepresentation is just easier fraud." It is easier to prove and harder to sustain — more exposed to the economic loss rule, and it does not support punitive damages.
"I have three years no matter what." For intentional fraud, from discovery. For negligent misrepresentation, assume two.
Where it came from
California codified deceit in 1872, and § 1710's four-part definition has been stable ever since. What has moved is the boundary between contract and tort.
For decades the economic loss rule pushed disputes between contracting parties into contract, where there are no punitive damages and no personal liability for the individuals involved. Robinson Helicopter (2004) carved out affirmative intentional misrepresentation. Rattagan (2024) extended similar reasoning to concealment, on conditions.
The pleading standard has run the other way. California's requirement that fraud against a corporation be pleaded with named speakers and stated authority is stricter than the federal rule, and it functions as a real filter — a plaintiff who was defrauded but cannot yet name the person who spoke may lose on demurrer before reaching discovery that would have supplied the name.
Common questions
How long do I have to sue for fraud in California?
Three years, and the statute itself provides that the claim does not accrue until you discover the facts constituting the fraud. Negligent misrepresentation may carry only two years — the question is unsettled, so assume the shorter period.
What does "pleading fraud with particularity" require?
The how, when, where, to whom, and by what means. Against a corporation you must also name the individuals who spoke, their authority to speak for the company, to whom they spoke, and what they said and when — a stricter standard than the federal rule.
Can I sue the individual who lied, not just the company?
Yes. That is one of the main reasons to plead fraud. The person who made the misrepresentation is personally liable, unlike on a contract claim against the entity.
What is the difference between fraud and negligent misrepresentation?
Only the state of mind. Intentional fraud requires knowledge of falsity or recklessness; negligent misrepresentation requires only that the defendant lacked reasonable ground to believe the statement true. But negligent misrepresentation does not support punitive damages and is more vulnerable to the economic loss rule.
Can I sue for fraud when we also have a contract?
Sometimes. The economic loss rule generally bars tort claims between contracting parties, but affirmative intentional misrepresentation escapes it, and since Rattagan v. Uber (2024) fraudulent concealment can too, on conditions.