B & R Development, Inc. v. Rogers
In B & R Development, Inc. v. Rogers, 561 S.W.2d 639, 641 (Tex. App.--Texarkana 1978, writ ref'd n.r.e.), the Court acknowledged that a party's fraud cause of action is barred or waived as a matter of law if, after they discover a deficiency and have full knowledge of it, they renegotiate the transaction and execute renewal notes.
Specifically, the Court stated where "one with knowledge of a fraud perpetrated on him in a prior transaction executed a renewal of his obligation, he thereby ratifies the original transaction and will not be permitted to plead fraud." Id. at 642.
This rule applies to "actions for damages or to recover consideration paid for property purchased as a result of fraudulent misrepresentation." Id.
The reasoning behind the rule is that fraud has been eliminated from the transaction where it has been renegotiated after discovery. Id. at 643.