Constructive Fraud

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Under contract law, a defendant can be liable to a plaintiff for constructive fraud if there was: (1) a false misrepresentation; (2) in reference to a material fact; (3) for the purpose of inducing the other party to rely on such representation; 4) on which the other party did justifiably rely; (5) which resulted in damages or injury; and (6) a fiduciary relationship between the parties. Hagarty v. Ithaca City School District, 423 N.Y.S. 2d 843 (1979).

Bad intent or dishonesty is not a requirement to satisfy constructive fraud.

The elements for actual and constructive fraud are the same with two exceptions: constructive fraud drops the element of scienter--knowledge on the part of the injurer of the representation’s falsity--and adds the element of a fiduciary relationship.