Appellate Division’s Growing Impatience With Parties Claiming Fraudulent Misrepresentation Refuted By Contract

As I have explained in this Blog, one of the most fundamental elements of a claim for civil fraud is the requirement that the party claiming fraud must have acted reasonably in relying on what it alleges is a misrepresentation so as to avoid being duped into doing something that is detrimental. That is, if there are means of reasonably ascertaining the truth of the matter allegedly misrepresented, the party trying to claim fraud must use those means to vet the representation made.

When a contract contains provisions that contradict or refute the alleged misrepresentation(s), that will sound the death knell for any attempted fraud claim. Even when the contract is not read, the party claiming fraud is placed with the responsibility to read it and know what it says—including the substance of other documents or contracts referenced in it. See, e,g., Express Terms of Contract Render any Reliance on Alleged Contrary Representations Unreasonable; Fraud Claims Barred by Signed Contracts Even if Not Read or Even Understood.

Two recent companion decisions of the Appellate Division, Second Department, are graphic examples: Axos Bank v Michael Gangi Plumbing & Heating Contrs., Inc., 2026 NY Slip Op 01175 (2d Dep’t Decided March 4, 2026) and Michael Gangi Plumbing & Heating Contrs., Inc. v World Bus. Lender, 2026 NY Slip Op 01194 (2d Dep’t Decided March 4, 2026).

Read the full blog post here.