What is the difference between civil fraud and breach of contract?

In New York, the difference between civil fraud and breach of contract lies in the details. Civil fraud is an intentional misrepresentation of material facts that one party makes to another with the intent of causing the other to act in a particular way. It is done knowingly and with willful disregard of the truth. Breach of contract, on the other hand, occurs when one party fails to fulfill the terms of an agreement as specified within a contract. Civil fraud is a tort and can lead to a civil lawsuit, whereas breach of contract is a breach of an agreement, whether written or verbal. A breach of contract may be found even if the breaching party did not intend to breach the contract. In the case of civil fraud, the party must know or should have known that they were making false statements. Civil fraud often results in damages, which are monetary losses suffered by the party who was misled or a benefit wrongfully obtained by the party who misled. With a breach of contract, the damages are usually limited to those that are specified in the contract. Civil fraud can also be divided into two categories: common law fraud, which includes intentional misrepresentation for the purpose of deceiving another, and statutory fraud, which is often used to identify frauds committed against the government. Depending on the circumstances, a breach of contract might also qualify as a form of civil fraud.

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