What is "constructive fraud"

Fraud \Fraud\ (fr[add]d), n. [F. fraude, L. fraus, fraudis; prob. akin to Skr. dh[=u]rv to injure, dhv[.r] to cause to fall, and E. dull.]

1. Deception deliberately practiced with a view to gaining an unlawful or unfair advantage; artifice by which the right or interest of another is injured; injurious stratagem; deceit; trick.

   If success a lover's toil attends, Few ask, if fraud or force attained his ends.
   --Pope.

2. (Law) An intentional perversion of truth for the purpose of obtaining some valuable thing or promise from another.

3. A trap or snare. [Obs.]

   To draw the proud King Ahab into fraud.
   --Milton.

   Constructive fraud (Law), an act, statement, or omission which operates as a fraud, although perhaps not intended to be such.
   --Mozley & W.

   Pious fraud (Ch. Hist.), a fraud contrived and executed to benefit the church or accomplish some good end, upon the theory that the end justified the means.

   Statute of frauds (Law), an English statute (1676), the principle of which is incorporated in the legislation of all the States of this country, by which writing with specific solemnities (varying in the several statutes) is required to give efficacy to certain dispositions of property.
   --Wharton.

   Syn: Deception; deceit; guile; craft; wile; sham; strife; circumvention; stratagem; trick; imposition; cheat. See Deception.

n. (context legal English) 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.

n. comprises all acts or omissions or concealments involving breach of equitable or legal duty or trust or confidence [syn: legal fraud]

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.