Constructive fraud

Constructive fraud

Constructive fraud is a legal fiction used in the law to describe 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[1] as in the case of actual fraud. Some unfair methods may include not telling customers about defects in a product[2].

The elements are[3]:

  1. a duty owing by the party to be charged to the complaining party due to their relationship[4];
  2. 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;
  3. reliance thereon by the complaining party;
  4. injury to the complaining party as a proximate result thereof; and
  5. the gaining of an advantage by the party to be charged at the expense of the complaining party.


References

  1. ^ "Montana Code Annotated". http://data.opi.mt.gov/bills/mca/28/2/28-2-406.htm. Retrieved 2009-03-10. 
  2. ^ "Law.com Dictionary". http://dictionary.law.com/default2.Asp?selected=318&bold=. Retrieved 2009-03-10. 
  3. ^ Strong v. Jackson, 777 N.E. 2d 1141 (2002).
  4. ^ A fiduciary duty is one such duty Sees v Bank One, footnote 8, page 3



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