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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 110370
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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Resolved Question:

A bank gave a builder a draw on a contractors full bill. However, the builder paid the contractor short on his bill as the work was not finished and he had to hire someone else to do the job right. Also the contractor was paid some of the bill in cash. Is this fraud by the builder even though the money went back into the house and what is the statute of limitations on the bank for trying to sue the builder.  State is Arizona
Submitted: 5 years ago.
Category: Business Law
Expert:  Law Educator, Esq. replied 5 years ago.
If all of the money was used on the house the builder did not commit any fraud and it was not unlawful for the builder to not pay the contractor in full, since the contractor was in breach of contract for not completing the job and the builder had to hire someone else to complete the job. If it were fraud, then under breach of contract the statute of limitations would be 6 years, but again this is not fraud as long as the money went to what it was supposed to go to.

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