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 Colorado, fraudulent inducement is recognized as a cause of action where one party intentionally misrepresents a material fact in order to induce another party into a contract. The misrepresented fact must be one that the other party reasonably relies upon, leading them to enter into a contract they otherwise would not have. This misrepresentation must also result in harm or loss to the party who relied on it. Colorado law allows for the combination of contract and tort elements in such cases, which can lead to the recovery of damages by the plaintiff. However, the potential for liability can be affected by the contract's specific language, including any disclaimer of reliance provisions that may state that the party did not rely on representations made by the other party. The outcome of a fraudulent inducement claim in Colorado will depend on the contract's terms and the overall context of the situation.