QUESTION
Can I sue someone I have invested money with and has failed to return on investment? I have the whole conversation in writing.
Asked on Dec 15th, 2017 on Breach of Contract - California
More details to this question:
I invested money in a friend´s company in California back in February 2016, and was promised a 40% return on investment within 4-6 months. I have the whole conversation in writing, with the offer, acceptance and time before return of investment. I also have the bank statements from when I sent the money. No official contract has been signed, as I thought this was my friend. Now, I cannot even get a reply from this person. Do I have legal ground to sue, or is there any other way for me to get my investment back.
1 ANSWER
By definition an investment is a risk. The fact that you lost money on your investment is not a basis for a suit. However, if you were defrauded into investing, that is another story. Did your ex-friend make any material mistatements of fact on which you reasonably relied in investing? If so you may have a claim. While I don't believe that a claim that you would receive a 40% profit within 6 months qualifies for various reasons (including that it is a prediction, not a statement of current fact, and that it is not reasonable to rely on any statement that you will get a 40% ROI in 6 months). However, if your friend lied about such things as having orders in place, the venture's financing and/or general financial condition, ownership of intellectual property, et. etc. which caused you to invest, you may have a claim.
Answered on Dec 15th, 2017 at 11:20 AM