The state of New Jersey has one of the toughest consumer fraud statutes in the country. With broad application, the law defines fraud to include more than just the “intentional misrepresentation of fact,” as traditionally construed. In New Jersey, you can also be found liable for consumer fraud if you knowingly concealed, suppressed or omitted any “material fact.”
“Knowing Omission” Under New Jersey Law
To provide the legal basis for a lawsuit, the concealment, suppression or omission of information must meet the following criteria:
- The person engaging in the concealment, omission or suppression of information must have had knowledge of the relevance of the information, as well as the knowledge that he or she was not disclosing the information.
- The omission must be of a “material fact.” Generally, a material fact is one that a reasonable person would expect might lead a person knowing it to make a different decision.
- The person omitting, concealing or suppressing the fact must have intended that others rely on that omission when making a decision.
With respect to home improvement, there are many ways that a consumer may be the victim of a failure to disclose by a contractor or subcontractor. For example, a general contractor may know that the materials used by a subcontractor are defective or of substandard quality, but may choose not to disclose that information to the homeowner because of cost concerns or time constraints. If a reasonable person would conclude that the homeowner would have chosen different materials if made aware of the substandard quality of those used, the homeowner may be able to pursue a claim under the New Jersey Consumer Fraud Act.
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