Fraud in the factum

Fraud in the factum

Fraud in the Factum is a type of fraud where misrepresentation causes one to enter a transaction without accurately realizing the risks, duties, or obligations incurred. Black's Law Dictionary (2nd Pocket ed. 2001 pg. 293). This can be when the maker or drawer of a negotiable instrument, such as a promissory note or check, is induced to sign the instrument without a reasonable opportunity to learn of its fraudulent character or essential terms. Determination of whether an act constitutes fraud in the factum depends upon consideration of “all relevant factors.” Fraud in the factum usually voids the instrument under state law and is a real defense against even an holder in due course.

Contrast this with the situation where a trusted employee signs a check without permission. The employer must still honor the check despite the fact that the check was a fraudulent negotiable instrument. Here, the employer had a reasonable opportunity to avoid the obligation by restricting access to the checks.

ee also

* Extrinsic fraud
* Fraud
* Intrinsic fraud
* "Per minas"

References


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Look at other dictionaries:

  • fraud in the factum — see fraud Merriam Webster’s Dictionary of Law. Merriam Webster. 1996. fraud in the factum …   Law dictionary

  • fraud in the factum — Fraud exercised in reference to the manual acts of signing and delivering an instrument, sometimes by a substitution of documents accomplished by deception. Blackburn v Morrison, 29 Okla 510, 118 P 402. Gomillion v Forsythe, 218 SC 211, 62 SE2d… …   Ballentine's law dictionary

  • fraud in the factum — noun fraud that arises from a disparity between the instrument intended to be executed and the instrument actually executed; e.g., leading someone to sign the wrong contract • Hypernyms: ↑fraud …   Useful english dictionary

  • fraud in the execution — fraud in the execution: fraud in the factum at fraud Merriam Webster’s Dictionary of Law. Merriam Webster. 1996 …   Law dictionary

  • fraud — n [Latin fraud fraus] 1 a: any act, expression, omission, or concealment calculated to deceive another to his or her disadvantage; specif: a misrepresentation or concealment with reference to some fact material to a transaction that is made with… …   Law dictionary

  • fraud — An intentional perversion of truth for the purpose of inducing another in reliance upon it to part with some valuable thing belonging to him or to surrender a legal right. A false representation of a matter of fact, whether by words or by conduct …   Black's law dictionary

  • fraud — An intentional perversion of truth for the purpose of inducing another in reliance upon it to part with some valuable thing belonging to him or to surrender a legal right. A false representation of a matter of fact, whether by words or by conduct …   Black's law dictionary

  • Fraud — Criminal law Part of …   Wikipedia

  • non est factum — A plea of the general issue in an action on a bond, a specialty, or a covenant, impeaching the instrument upon which suit is brought or denying the execution and signing thereof. Dilworth v Federal Reserve Bank, 170 Miss 373, 154 So 535, 92 ALR… …   Ballentine's law dictionary

  • Meeting of the minds — For the talk show, see Meeting of Minds. Meeting of the minds (also referred to as mutual agreement, mutual assent or consensus ad idem) is a phrase in contract law used to describe the intentions of the parties forming the contract. In… …   Wikipedia

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