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 Vermont, fraudulent inducement is recognized as a cause of action when one party to a contract intentionally misrepresents a material fact, leading another party to enter into the contract based on that misrepresentation. The misrepresented fact typically pertains to the risks, duties, or obligations within the contract. For a claim of fraudulent inducement to be successful in Vermont, the plaintiff must demonstrate that they reasonably relied on the misrepresentation and that it caused them harm or loss. This type of claim is a blend of contract and tort law, sometimes referred to as a 'contort' claim. Vermont law allows plaintiffs to recover damages if they can prove fraudulent inducement. However, the liability of the party who made the misrepresentation may be affected by a disclaimer of reliance provision within the contract. The enforceability of such a provision would depend on the specific language of the contract and the overall context of the situation. An attorney can provide guidance on the likelihood of success for a fraudulent inducement claim and the impact of any disclaimer of reliance provisions in the contract.