Calif. High Court Overturns Contract Fraud Limitation Rule

Law360, New York (January 15, 2013, 10:38 PM EST) -- The California Supreme Court on Monday overturned a long-standing rule that limits the situations in which evidence of contract fraud can be presented, ruling in a loan-agreement case involving a written contract that contradicted what the borrowers were promised beforehand.

In the high court's dismissal of the so-called Pendergrass limitation, Justice Carol Corrigan wrote that it is “difficult to apply” and can provide a shield for the fraudulent conduct it was intended to remedy. In addition, the 78-year-old Pendergrass limitation deviated from established California law of...
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