CIVIL FRAUD

Conduct that constitutes civil fraud is incapable of precise definition, but it usually includes some type of deceitful, dishonest, or unfair behavior.  The primary difference between civil fraud and criminal fraud is that to succeed on a claim for civil fraud there must be damages; that is, someone must suffer a tangible injury. Criminal fraud can be prosecuted even if unsuccessful.

Claims for civil fraud are usually based on a fraudulent misrepresentation or inducement.  Although all states may have slightly different elements that must be met to maintain a fraud action, commonly plaintiff must prove a misrepresentation, concealment, or deceit as to a material fact, the defendant’s knowledge as to the falsity of the representation, the defendant’s intention to induce the reliance by the plaintiff, actual reliance on the representation by the plaintiff to the detriment of the plaintiff, and the plaintiff suffered an injury as a result.

Fraud is different than a breach of contract or warranty because fraud requires an intent to deceive and knowledge of the deception. A contract, sale, transaction, or judgment procured by fraud can be rendered void. This intent element also distinguishes fraud from an action founded upon negligence or mistake.

An important component proving civil fraud is that any damages must be the proximate result of the fraud. Therefore, regardless of how egregious a misrepresentation may be, if the plaintiff does not rely on it or there is no injury connected to it, then no relief is available in a civil action. Compensatory and punitive damages are potential remedies in a civil fraud case.