What's the difference between Fraud and Constructive Fraud?

Asked about 2 years ago - Phoenix, AZ

What is the difference between the two, and can punitive damages be sought in either cause of action?

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  1. C. Andrew Campbell

    Contributor Level 15

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    Answered . Punitive damages can be claimed in either fraud or constructive fraud cases, whether they are awarded will be based on the evidence presented.

    In general, fraud is ordinarly considered an active mistatement or concealment of material fact. Fraud generally requires an intent to deceive.

    Constructive fraud requires the existence of a confidential relationship, but does not normally require a showing of either intent to deceive or dishonesty of purpose.

    This information is provided for general informational purposes and is not intended as legal advice. An attorney... more
  2. Ronald Lee Burdge

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    Answered . Every state has its own definition of what “fraud” is. Generally, there are two kinds of fraud. One is where the lie is intentionally stated (lawyers call that actual fraud). The other is where one person gains an unfair advantage over another by some kind of unfair method, although an intentional lie may not be clearly shown (lawyers often call that constructive fraud because the law takes the circumstances and “constructs” a fraud). Either one, fundamentally, means that it is a lie that costs you money. But lies can come in different forms. It could be an outright lie, where they know that in fact what they are saying to you is a lie. It could also be a part-truth statement, where they say something that is only partly true and lie to you or mislead you about the rest of what they are saying. Or it could be hiding the truth from you by not telling you something that they know you would want to know. Those last two might be called constructive fraud. No matter what kind of lie it might be though, unless you lose something because of it, you have not been damaged. And “damages” are required for you to be able to legally do anything about being defrauded in a transaction. To learn more about Fraud, read this free online Avvo Legal Guide “What is Fraud?” here: http://www.avvo.com/legal-guides/ugc/what-is-fr.... Because the law is different in each state though, if you think you are the victim of fraud then you need to talk to a local Fraud Law attorney who deals with your kind of situation or case. Call your local attorney's Bar Association and ask for a referral to an Fraud or Consumer Law attorney near you or you can go to this web site page for a Free Online 50 State National List of Consumer Law Lawyers (http://www.ohiolemonlaw.com/ocll-site/ocll-loca...) and find one near you (lawyers don’t pay to get listed here and most of them are members of the only national association for Consumer Law lawyers, www.NACA.net). Most Consumer Law attorneys also know Fraud laws. But act quickly because for every legal right you have, there is only a limited amount of time to actually file a lawsuit in court or your rights expire (it's called the statute of limitations), so don't waste your time getting to a Consumer Law attorney and finding out what your rights are. And don’t bother talking with an attorney who handles just other areas of law because, frankly, Fraud Law and particularly “car sales fraud law” is a special area with its own laws, regulations, rules, and strategies and tactics. If this answer was helpful, please give it a “Vote Up” below. And please be sure to indicate the best answer to your question so we can all be sure we are being helpful. Thanks for asking and good luck. Ron Burdge, www.BurdgeLaw.com, www.CarSalesFraud.com

    Go to this web site page for a Free Online 50 State National List of Consumer Law Lawyers
    http://www.ohiolemonlaw.com/ocll-site/ocll-loca...

    What is Fraud? Read this Avvo Legal Guide and find out before you become a victim of fraud, click here
    http://www.avvo.com/legal-guides/ugc/what-is-fr...

    This answer is for general purposes only and does not establish an attorney-client relationship. The law in your... more

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