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 Pennsylvania, fraudulent inducement is recognized as a cause of action where one party intentionally misrepresents a material fact to another during contract negotiations, leading the latter to enter into a contract based on that misrepresentation. The misrepresented fact must be significant to the contract's terms and the injured party must have reasonably relied on the misrepresentation to their detriment. Pennsylvania courts will consider the presence of a 'disclaimer of reliance' provision in the contract, which may protect the misrepresenting party from liability if it clearly indicates that the other party did not rely on their representations. However, the effectiveness of such a disclaimer can depend on the specific language used and the overall context of the situation. If a court finds that fraudulent inducement occurred, the injured party may be entitled to rescind the contract and/or receive damages for the losses suffered.