13.6 Defenses to Fraud

• Jurisdiction: Arizona

13.6 Defenses to Fraud. Fraud claims are typically defended by the actor claiming that the recipient cannot make out a prima facie case. That is, the party who claims to be defrauded is unable to prove one or more of the nine essential elements. For example, a party may claim that a misrepresentation is not actionable because it is an opinion, or the listener is not justified in relying upon the statement. Examples of these cases are discussed in detail under the element sections above.

The other avenue for avoiding liability is to prove one of the following affirmative defenses: laches;¹¹⁶ waiver;¹¹⁷ estoppel;¹¹⁸ unclean hands;¹¹⁹ failure to mitigate;¹²⁰ illegality;¹²¹ ratification;¹²² and election of remedies.¹²³ However, the defendant bears the burden of proving these defenses¹²⁴, which obviously is tougher than arguing the other party has failed to meet their burden.

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Notes:

^[116]See Jerger v. Rubin, 106 Ariz. 114, 117-18, 471 P.2d 726, 729-30 (1970) (rejecting defendant’s argument that fraud claim for rescission was barred by the doctrine of laches, waiver and estoppel).

^[117]Id.

^[118]Id.

^[119] The unclean-hands doctrine can be asserted in cases when equitable remedies are sought. See, e.g., Sports Imaging of Ariz., LLC v. 1993 CKC Trust, 1 CA-CV 05-0205 (Ariz. App., Sept. 30, 2008)...