Skip to main content Skip to Search Box

Definition: fraud from QFinance: The Ultimate Resource

dishonest methods used for personal benefit the use of dishonesty, deception, or false representation in order to gain a material advantage or to injure the interests of others. Types of fraud include false accounting, theft, third party or investment fraud, employee collusion, and computer fraud. See also corporate fraud


Summary Article: fraud from The Columbia Encyclopedia

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.

The Columbia Encyclopedia, © Columbia University Press 2017

Related Credo Articles

Full text Article FRAUD
The New Encyclopedia of Judaism

In Jewish law, when a business contract is shown to be based on fraudulent premises, the contract may be canceled or the injured party awarded...

Full text Article fraud
The Macmillan Encyclopedia

In law, making a false representation, by words or conduct or by withholding facts where there is a duty to disclose them, in order to obtain...

Full text Article FRAUD
Encyclopedia of Crime and Punishment

Throughout the 1990s and into the twentyfirst century, the incidence of “street crimes” such as robberies, burglaries, simple assaults,...

See more from Credo