Fraud

In one sentence

Intentional deception or misrepresentation made to trick someone into entering a contract or deal.

Plain English

Fraud is when someone deliberately lies or hides the truth to trick you into making a deal you wouldn't otherwise make. It can involve false statements, hiding important facts, or pretending to be someone you're not. If you can prove fraud, you can usually cancel the contract and sometimes get extra damages to punish the wrongdoer. Fraud is taken seriously because it undermines the whole idea that contracts are made by honest agreement.

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Example

A used car dealer rolls back the odometer from 100,000 miles to 50,000 miles and sells you the car, knowing you wouldn't pay as much if you knew the real mileage. That's fraud, and you can rescind the sale and recover your money.

Used in a sentence

“The seller's fraud in misrepresenting the property's condition gave the buyer grounds to rescind the contract.”

Related terms

concealment

The act of hiding or keeping secret something that should be disclosed, especially in legal matters.

Material Fact

A fact that significantly affects a party's rights, obligations, or decision-making in a contract.

Rescission

Unwinding a contract entirely, returning both parties to their positions before the deal.

Voidable Contract

A contract that one party can cancel or reject, but is otherwise valid.

Affirmation

A party's decision to keep a contract or agreement even after discovering a reason to cancel it.

Evidence

Information, documents, or physical items presented in court to prove or disprove facts.

Offer

A proposal to enter into a binding agreement on specific terms.

Acceptance

Agreeing to the exact terms of an offer, creating a binding contract.

This page is a plain-English reference and is not legal advice. Laws vary by jurisdiction and change over time. For specific situations consult a licensed attorney.