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