SCOTX: Written Contracts Can Protect Corporations’ Fraudulent Conduct

The Texas Supreme Court ruled Friday that a company victimized by the fraudulent conduct of a business partner cannot use the civil justice system to recover damages caused by the illegal activity if the two businesses signed a written contract covering the issues in question.

In a unanimous 19-page opinion, the state’s highest court said that a written contract between Mercedes-Benz USA and a South Texas car dealership, Carduco Inc., exempts the automaker from being held financially responsible for the economic losses it caused by its false oral promises and misleading comments, which a jury that heard all of the evidence in the case described as criminal.