Texas Codes

Tex. Bus. & Com. Code § 27.01 (2026)

Fraud In Real Estate And Stock Transactions

✓ current as of May 2026

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Sec. 27.01. FRAUD IN REAL ESTATE AND STOCK TRANSACTIONS. (a) Fraud in a transaction involving real estate or stock in a corporation or joint stock company consists of a

(1) false representation of a past or existing material fact, when the false representation is

(A) made to a person for the purpose of inducing that person to enter into a contract; and

(B) relied on by that person in entering into that contract; or

(2) false promise to do an act, when the false promise is

(A) material;

(B) made with the intention of not fulfilling it;

(D) relied on by that person in entering into that contract.

(b) A person who makes a false representation or false promise commits the fraud described in Subsection (a) of this section and is liable to the person defrauded for actual damages.

(c) A person who makes a false representation or false promise with actual awareness of the falsity thereof commits the fraud described in Subsection (a) of this section and is liable to the person defrauded for exemplary damages. Actual awareness may be inferred where objective manifestations indicate that a person acted with actual awareness.

(d) A person who (1) has actual awareness of the falsity of a representation or promise made by another person and (2) fails to disclose the falsity of the representation or promise to the person defrauded, and (3) benefits from the false representation or promise commits the fraud described in Subsection (a) of this section and is liable to the person defrauded for exemplary damages. Actual awareness may be inferred where objective manifestations indicate that a person acted with actual awareness.

(e) Any person who violates the provisions of this section shall be liable to the person defrauded for reasonable and necessary attorney's fees, expert witness fees, costs for copies of depositions, and costs of court.

Acts 1967, 60th Leg., vol. 2, p. 2343, ch. 785, Sec. 1. Amended by Acts 1983, 68th Leg., p. 5208, ch. 949, Sec. 1, 2, eff. Sept. 1, 1983.

Notes of Decisions

Cited in 7 cases (1 in the last 5 years), 1983–2026 · leading case: Wilhoite, Sandra Lynn v. Sims, Linda Diane, 401 S.W.3d 752 (Tex. App. 2013).

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Wilhoite, Sandra Lynn v. Sims, Linda Diane, 401 S.W.3d 752 (Tex. App. 2013). “Tex. Bus. Com.Code Ann. § 27.01 (West 2009).”

Ginn v. NCI Bldg. Sys., Inc., 472 S.W.3d 802 (Tex. App. 2015). “” See Tex. Bus. Com. Code Ann. § 27.01 (a). Thus, the trial court properly submitted to the jury the question of whether Ginn had committed statutory fraud.”

Weinacht v. Phillips Coal Co., 673 S.W.2d 677 (Tex. App. 1984). “TEX.BUS.COMM. CODE ANN. § 27.01 was not intended to apply to a breach of contract.”

Fillion v. Troy, 656 S.W.2d 912 (Tex. App. 1983). “Appellant next contends that Tex. Bus.Com.Code Ann. § 27.01 (Vernon 1968), governing fraud in real estate transactions, limits the award of exemplary damages to twice the amount of actual damages.”

Janis Fair & River Rock Event Ctr., Inc.// Gabriela Powell, Keith Powell, & Grove Operating, LLC v. Gabriela Powell, Keith Powell, & Grove Operating, LLC// Cross-Appellee, Janis Fair & River Rock Event Ctr., Inc. (2026). “Tex. Bus. & Com. Code § 27.01; Fibela v. Wood, 21 657 S.”

Texas Gulf Resources, Inc. v. Danny S. Davis, Escopeta Oil & Gas Corp. (Tex. App. 2003). “See Tex. Bus. Com. Code Ann. § 27.01 ( a) (Vernon Supp.”

Sierra Associate Grp., Inc. D/B/A New Austin Homes v. Bryan Hardeman Hardeman Fam. Jt. Venture, Ltd. Richard A. Smith Sandion G.P. & Tosca Gruber (Tex. App. 2009). “Sierra's claims for common law fraud, statutory fraud in a real estate transaction, and negligent misrepresentation all share the common element of reliance.”

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