13.5 Remedies

• Jurisdiction: Arizona

13.5 Remedies. In establishing the amount of damages that are recoverable, Arizona has, from the outset, applied the benefit-of-the-bargain measure.¹⁰⁷ However, there have been subsequent cases in which benefit-of-the-bargain damages were difficult, if not impossible to prove.¹⁰⁸ As a result, the Arizona Court of Appeals adopted the position that “‘consequential damage’ is a proper measure of damages in a fraud action . . .”¹⁰⁹ In doing so, the court specifically pointed out that “a defrauding party may not limit the proof of damages to the benefit of the bargain ...”¹¹⁰ This, of course, squares with the notion that a party’s losses must be proximately caused by its reliance on the misrepresentations. Punitive damages may also be recovered in a claim for fraud,¹¹¹ but only if the party shows the actor’s “evil” state of mind and that the conduct was “aggravated and outrageous.”¹¹²

A party may also pursue rescission, in which case the court will return the defrauded party to the position it was in before it relied on the misrepresentation.¹¹³ In some cases, this may include recovery of consequential damages in order to make the defrauded party whole.¹¹⁴ The defrauded party may also be able to recover attorneys’ fees if the fraud “arises out of” a contract.¹¹⁵

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