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Constructive 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[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]

  • a duty owing by the party to be charged to the complaining party due to their relationship;[4]
  • 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.

References

  1. ^ "Montana Code Annotated". Retrieved 2009-03-10.
  2. ^ "Law.com Dictionary". 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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