FRAUD

Fraud and deceit are substantially the same. Here, we will discuss actual fraud which arises out of a contractual relationship when committed by a party to the contract. (Civil Code section 1572) Fraud can be referred to as "fraud in the inducement" or "fraud in the inception." The former kind of fraud occurrs when a person knows what he is signing but is induced to sign it by the fraud of another. The latter fraud occurrs when a person is deceived as to the nature of the contents of the document itself. For example, a person may be led to believe that he or she is signing a document other than a deed. Because of the fraud the deed is void.

Fraud may be committed in the following ways:

"1. Intentional Fraud - The suggestion, as a fact, of that which is not true, by one who does not believe it to be true;

2. Negligent Fraud - The positive assertion, in manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true;

3. Concealment - The suppression of that which is true, by one having knowledge or belief of the fact;

4. Promissory Fraud - A promise made without any intention of performing it; and

5. General Fraud - Any other act fitted to deceive."

(California Civil Code section 1572)

CAVEAT: Please consult an attorney for legal advice. Laws in the United States differ from one jurisdiction to another. Any law stated herein is for educational purposes only and may not apply to your particular circumstance.

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This document was last revised on February 28, 2005.

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