Fraudulent inducement—also known as fraud in the inducement—is a tort (wrongful act) claim or cause of action recognized in some states for fraud that occurs when one party to a contract intentionally misrepresents a material fact—usually regarding the risks, duties, or obligations involved—that another party to the contract reasonably relies on, causing the second party to enter into a contract it would not have agreed to if not for the fraudulent representation, and causing harm (damages or losses) to the party who reasonably relied on the misrepresentation.

Because fraudulent inducement combines elements of contract and tort law it is sometimes referred to as a "contort" claim or cause of action. In states that recognize a fraudulent inducement cause of action, the plaintiff may file a lawsuit and recover damages.

But a party who made an intentional misrepresentation may avoid liability if the other party contractually disclaimed any reliance on the first party’s fraudulent representations (a disclaimer of reliance provision in the contract). Whether a party is liable in any particular case depends on the contract’s language and the totality of the surrounding circumstances.

In California, fraudulent inducement is recognized as a cause of action when one party to a contract intentionally misrepresents a material fact, leading the other party to enter into the contract based on that misrepresentation. The misrepresented fact must be material and such that the defrauded party relied on it when deciding to enter into the contract, resulting in harm or loss. This cause of action is a blend of contract and tort law, sometimes referred to as a 'contort' claim. To establish a claim for fraudulent inducement in California, the plaintiff must prove the misrepresentation, reliance on the misrepresentation, and resulting damages. However, the defendant may be able to avoid liability if there is a disclaimer of reliance clause within the contract that effectively states that the defrauded party did not rely on the representations of the other party. The enforceability of such disclaimers can depend on the specific language of the contract and the circumstances of the case. It is important to note that the success of a fraudulent inducement claim can be complex and fact-specific, often requiring the expertise of an attorney to navigate the legal intricacies.