Constructive fraud is a term that is applied to a great variety of transactions that are wrongful under equity, and which it attributes the same or similar effects as those that follow from actual fraud. Additionally, it gives the same or similar relief as that granted in cases of real fraud. Constructive fraud may be based on a misrepresentation or concealment, or the fraud may consist of taking advantage of the fiduciary relationship at the expense of the confiding party. Therefore, constructive fraud exists where a duty under a confidential or fiduciary relationship has been abused or where an unconscionable advantage has been taken. However, a cause of action for constructive fraud will not lie where the parties are dealing at arms length because there is no duty imposed on either party to protect or benefit the other.

Under Florida law, constructive fraud exists where a duty arises from a confidential or fiduciary relationship which has been abused, or where an unconscionable advantage has been taken. Essentially, a breach of fiduciary duty claim is equivalent to a constructive fraud claim, where it is based on misrepresentations or concealment. For example, where a defendant induces another person to enter into a contract with him or her by the positive assertion of a fact or statement of facts material to the agreement, which do not really exist, and the plaintiff relies on the misrepresentation to his or her detriment, the view of equity is that it would be unconscionable to allow the defendant to retain the fruits of the bargain. Therefore, a defendant should be held liable for constructive fraud, even if he or she did not know that the statement was false. The party is bound at his or her own peril to know the truth of the matter of which he or she speaks. Thus, the inquiry is not whether the party knew the representation was false, but whether the other party believed it to be true and was misled by it in entering into the contract.

A cause of action for fraud can be a complex, expensive, and an emotionally charged action. Therefore, a plaintiff should make sure that he or she consults with an experienced West Palm Beach fraud lawyer. If you believe you have a legitimate claim for fraud call Sharmin & Sharmin P.A. at 1-800-74-TRIAL.