Constructive Fraud, Defined

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From Wikipedia, the free encyclopedia

Constructive fraud is a legal fiction describing a situation where a person or entity gained an unfair advantage over another by deceitful or unfair methods. Intent does not need to be shown® as in the case of actual fraud. Some unfair methods may include not telling customers about defects in a product.®

The elements are:®

  • a duty owing by the party to be charged to the complaining party due to their relationship;®
  • violation of that duty by the making of deceptive material misrepresentations of past or existing facts or remaining silent when a duty to speak exists;
  • reliance thereon by the complaining party;
  • injury to the complaining party as a proximate result thereof; and
  • the gaining of an advantage by the party to be charged at the expense of the complaining party.
  • Jump up* “Montana Code Annotated”. Retrieved 2009-03-10.
  • Jump up* “Law.com Dictionary”. Retrieved 2009-03-10.
  • Jump up* Strong v. Jackson, 111 N.E. 2d 1141 (2002).
  • Jump up* A fiduciary duty is one such duty Sees v Bank One, footnote 8, page 3