What is constructive fraud in civil law?

Constructive fraud is a type of civil fraud that occurs in California when an individual or company willfully fails to perform a legal obligation. This type of fraud does not require intent to deceive or misinform, but rather involves a deliberate neglect to fulfill an obligation. For example, if an individual purchases a vehicle from a seller and signs a contract that stipulates the seller must register the vehicle within a certain amount of time, and the seller fails to meet the said obligation, this could be considered constructive fraud. This is because the seller willfully neglected to fulfill the obligation they agreed to in the contract and the buyer was left in a situation where they could not register the vehicle. Constructive fraud can also occur when someone intentionally withholds information or knowingly misrepresents information in a contract, such as a home loan. If a lender fails to disclose the true terms of the loan or misrepresents information on purpose, this could be considered constructive fraud. Constructive fraud is a serious type of civil law violation. If an individual or company is found guilty of committing it, they could face consequences including fines, legal fees, and even criminal charges. To avoid the possibility of constructive fraud, all parties should be sure to thoroughly review the terms of any contract before signing.

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What is constructive fraud in civil law?

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