Section 7.11 Fraud

• Library: Settling Cases 2014

A release obtained by fraudulent representation is either void or voidable depending on the nature of the fraud. Kestner v. Jakobe, 412 S.W.2d 205 (Mo. App. S.D. 1967), overruled on other grounds by State ex rel. Normandy Orthopedics, Inc. v. Crandall, 581 S.W.2d 829 (Mo. banc 1979).

Missouri cases also distinguish between releases obtained through fraud in the treaty (i.e., in the inducement) and fraud in the factum (i.e., in the execution). Nelson v. Browning, 391 S.W.2d 873 (Mo. 1965); Kestner, 412 S.W.2d 205; Montrose Sav. Bank v. Landers, 675 S.W.2d 668, 671 (Mo. App. W.D. 1984). A plaintiff in a claim or cause of action who signs a release and accepts the benefits from that release does not need to return the benefits if it is later alleged and pleaded that the release resulted from fraud in the factum. Nelson, 391 S.W.2d at 877. Such fraud renders the release void, and no tender of its benefits is necessary. Id. But fraud in the treaty makes a release merely voidable...