Is a high % agent commission contract clause fraud in your jurisdiction? Say you are offered investments that look like regular mutual fund investments. You ask how much money is invested. The sales people say, all funds are invested. You read the contract and found nothing suspicious. Turns out, you overlooked a verse in the 20 page contract that states that 50-70% of the money goes to pay the agent commission; only partially % is invested. The very important term is well hidden within those 20 pages. You confront the sales people and they say that all of the money is invested. If you let the investment grow, in 1000 years you'll get your money back if the market is good. So the whole thing is "long term investment". Is this fraud? What does the law says in say Indonesia, USA, or anything? NB: If it's a fraud, is this a crime or still just purely civil matter? Update: In Indonesia many insurance companies charge high acquisition costs. So 100% of premi is gone to pay for the acquisition costs. Actually the total amount gone is about 230% of yearly premi. Things get interesting because in some companies, even when the insurance benefit only worth $10, an agent can set premi to be very high (thousands of dollars or even more) and claim that all money are "invested". So basically customers put $5k on "investment". Agent says "all are invested." Customer thinking that all are invested put huge money only to see all those money are gone for fees. Customers got Nothing. All money are gone for acquisition fee. About 50% is to pay insurance agent. Insurance protection worth $10. An option to "continue" the "investment" where customers will lost even more money for insignificant insurance cost. Basically customer miss the part where it says that 100% of premiums are gone for acquisition fees. It's written in contract but quite well hidden among terms that's not important due to low insurance portion of the arrangement (like how to file a claim). Note: If you said that this is fraud in your own jurisdiction, please tell what exact laws/court case a person can use to sue the agent or companies. In Indonesia, for example, there is law that customer have right to get information that is honest, clear, and correct. However, the company can says that the information is there in the middle of the contract that the customer have agreed. The company can also says that they have paid agent to "explain" the contract to customers and if anything goes wrong, it's "agent's" fault. Basically this question relates to When a contract is being analyzed in court, is it the understanding of the parties or the written contract that is to be established? Basically the customer miss some important term of the contract. However, the contract is written in such a way that most people would miss those terms.
It might or it might not be fraud. The outcome will depend on how the facts and evidence are interpreted at trial. A more general version of this question is: If two parties discuss and orally agree to X; then sign a contract that states they agree to Y, what are the parties bound to? X? Y? Or something else? In your version, X is a fraudulent statement. And Y is an obfuscated writing. One party will argue fraud. The other will argue not fraud on the basis that all the facts were disclosed in writing. The party alleging fraud will carry the burden of proof. The standard of proof will be preponderance of evidence (more than 50%). Generally speaking, written evidence outweighs oral evidence if not accompanied by substantiating facts. Substantiating facts could be: emails or other written correspondence, a prior history or pattern of making false claims to others regarding this investment, the respective behavior of the parties after the agreement was made or anything else that corroborates the oral testimony presented at trial.
The liability shield is the big one, and it can't be achieved with a contract. Just because the contract says you're not liable, that doesn't make it true. If I sign a contract with my friend that says "Nate Eldredge is hereby the King of France", that won't make me the king, nor will it force anyone except maybe my friend to acknowledge me as the king. By its nature, a contract can only bind the parties to the contract, and has no effect on the rights of anyone else. Suppose, then, that Alice and Bob agree to start a pizza delivery business, using a contract like you suggest. Their delivery car crashes, injuring Carol, a bystander, who incurs medical bills that exceed the assets of the business. Carol decides to sue Alice and Bob personally. Sure, Alice and Bob have a contract, and maybe it prevents them from suing each other, but it certainly doesn't prevent Carol from suing them; Carol never signed it. So Carol can still go after Alice and Bob's personal assets. Thus contract law cannot give them a liability shield. However, the government can, since it makes the laws about who can sue whom under what circumstances. And it has made laws saying that Alice and Bob can be protected from such suits, but only if they form a company according to the process that the law sets forth. So that's what they have to do.
Political risk insurance exists, but not in the format hypothesized. What the question is contemplating is more like a gambling bet, or a futures contract (which is a type of "derivative" contract), than insurance. What constitutes an insurable risk of harm to an insurable interest is mostly a matter of common law although there are some state statutes on point in the U.S. which is the level of federalism at which insurance is regulated. Basically, you can only insure against a loss to an "insurable interest" caused by an insurable risk. In practice, this means that insurance has to be linked to an individualized loss of an individual or business that is clearly and directly caused by a covered occurrence. A change in governing political party itself, doesn't give rise to such a loss. The mere fact that a party is elected or that the people elected take an oath of office, doesn't itself change any laws or regulations. It just puts in place people who might do such things in the future. Political risk insurance, when it exists, insures against the nationalization of one's business at a loss, or against the industry that one is engaged in becoming illegal, at a loss. It is the specific action taken by the newly elected regime towards the particular insured firm or individual, and not the actual new regime itself, that gives rise to a loss to an insurable interest in the case of political risk insurance. For example, you might be able to buy political risk insurance against the possibility that your marijuana business which is legal under state law but not federal law, will be seized in a civil forfeiture or shut down by a change in the practical effect of the relevant state law. If you are worried that your company's stock will decline in value due to an election result, the available financial instrument would be to short sell your company's stock, hedging against losses arising from a drop in stock price below a certain dollar value by a certain date for any reason. If your company is not publicly held, the risk of a decline in business due to an election result is not something that can be insured against.
A contract can’t legalise illegality Let’s assume that absent the “simulation” disclosure in the ToS, this would be fraud. The question then becomes, does making the disclosure make it not fraud? Fraud requires dishonesty and deception. These are measured by what a reasonable person would determine from the overall conduct so a small piece of truth in amongst a web of half-truths and outright lies is still dishonest and deceptive. From the perspective of US law, is Bob doing this regarded a scam? No, but only because “scam” isn’t a legal term - it’s slang for fraud and this is fraud Is this a criminal case, or a civil case? Both What evidence can Tom provide to support the lawsuit? Whatever he has. However, in practice, these types of fraudsters are rarely ever caught and it’s even more rare for the victim to recover their money. They are usually off-shore in countries with either poor rule of law or which will not extradite their nationals.
No, this is not an acknowledgement of guilt or liability. It offers a &quot;discount&quot; some sort of reduction in price. This could be an offer of settlement without admission of liability, or even just advertising for repeat business (unlikely as that may seem). Without the rest of the communication, there is no way to tell. Unless there are specific admissions, this statement alone is not likely to have much significance in such a case. Edit: There is still not enough context to tell exactly what the sender of this communication wanted to accomplish with the offer of the discount, but since the OP now says &quot;the party does not take the responsibility&quot; this is not an admission of guilt, whatever else it is. It sounds like some sort of backdoor form of settlement offer without admission, but that is far from clear to me. My original answer is not significantly hanged here.
I can’t speak for Indonesia but if you did this in Australia you would be a criminal. You either committed fraud or are an accessory to fraud. You would probably be considered an accessory at and after the fact which means you are subject to the same maximum penalty as if you had committed the fraud yourself - 10 years in jail. In addition, you are liable to repay the money taken, jointly and severally with your ‘friend’. However, if they can only find you, you cannot recover from your ‘friend’ as you were engaged in a joint criminal enterprise. Scams such as you describe are distressingly common and many people fall for them. As such, assuming the court accepted your story (because you might actually be the fraudster and have just made it up) you would be unlikely to get close to the full sentence and if you caught the judge on a good day, might even escape jail. If you are lucky, the jury might acquit, even though, on the facts, they shouldn’t - juries do what juries do. If you’re really lucky the police might decide not to prosecute.
Jurisdiction has not been provided, so I've written a general answer: Not necessarily; often, such provisions clauses will have their own expiration dates, for example "for five years after signing, X", with X still being valid after cancellation up to 5 years(so if you cancel after 3 years, X is still valid for 2 more years), or "for two years after cancellations, Y"(especially common with non-compete clauses) where the time-limit of Y starts when the contract is cancelled. Other clauses are meant to indeed be enforced forever, such as some non-disclosure, non-disparagement, or indemnity clauses. For example, an indemnity clause in a contract that prevents a party from suing the counter-party for work done under the contract would be pointless if it could be bypassed by a party terminating the agreement. There are lots of legal limits, based on the terms of the provision, and its nature, all governed by the contract law of the jurisdiction under which the contract was drafted under and/or is governed by (this is generally obvious, except for some cross-border contracts, which generally will have a declaration as to whose laws apply). It is not inherently abusive, but can certainly be abused. What is considered abusive often varies from jurisdiction to jurisdiction (not only on this issue, but on legal issues in general). It depends on the jurisdiction, and generally on the terms of the provision itself. If the court asked to enforce the terms of the agreement feels that the provision is illegal or abusive, they won't be enforced (and possibly the entire document declared null and void, depending on the central-ness of the illegal or abusive provision; some provisions specifically state that invaliding the provision doesn't invalidate the whole contract to try to prevent this). If they don't feel the provision is illegal or abusive, they will generally enforce it.
There is no prohibition on lying in general. Misrepresentation If you misrepresent a fact and that misrepresentation is a material inducement to someone entering into a contract with you then there are a number of problems that follow: The (mis)representation may become a term of the contract and if not complied with can allow the aggrieved party to either sue for damages or rescind the contract. If the misrepresentation led to the contract being entered into by mistake then the contract is void for mistake The misrepresentation may have become a collateral contract an innocent or negligent misstatement may give rise to the tort of negligent misstatement misrepresentation may put you in breach of trade practices statutes. Fraud If you knowingly tell a lie with the intention of receiving a benefit then this is both the tort and crime of fraud. You receiving employment or your company securing a contract probably qualifies as intending to receive a benefit.