fraud (redirected from defrauding)

fraud, in law, willful misrepresentation intended to deprive another of some right. The offense, generally only a tort, may also constitute the crime of false pretenses. Frauds are either actual or constructive. An actual fraud requires that the act be motivated by the desire to deceive another to his harm, while a constructive fraud is a presumption of overreaching conduct that arises when a profit is made from a relation of trust (see fiduciary). The courts have found it undesirable to make a rigid definition of the type of misrepresentation that amounts to actual fraud and have preferred to consider individually the factors in each case. The misrepresentation may be a positive lie, a failure to disclose information, or even a statement made in reckless disregard of possible inaccuracy. Actual fraud can never be the result of accident or negligence, because of the requirement that the act be intended to deceive. The question of commission may depend upon the competence and commercial knowledge of the alleged victim. Thus dealings with a minor, a lunatic, a feeble-minded person, a drunkard, or (in former times) a married woman are scrutinized more closely than dealings with an experienced businessman. A lawsuit based upon actual or constructive fraud must specify the fraudulent act, the plaintiff's reliance on it, and the loss suffered. The remedy granted to the plaintiff in most cases is either compensatory (and possibly punitive) damages for the injury or cancellation of the contract or other agreement and the restoration of the parties to their former status. In a few states of the United States both damages and cancellation are available. In certain suits based upon a contract, fraud may be introduced as a defense.

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fraud

In law, the deliberate misrepresentation of fact for the purpose of depriving someone of a valuable possession or legal right. Any omission or concealment that is injurious to another or that allows a person to take unconscionable advantage of another may constitute criminal fraud. The most common type of fraud is the obtaining of property by giving a check for which there are insufficient funds in the signer's account. Another is the assumption of someone else's or a fictitious identity with the intent to deceive. Also important are mail and wire fraud (fraud committed by use of the postal service or electronic devices, such as telephones or computers). A tort action based on fraud is sometimes referred to as an action of deceit.