equitable fraud

Actions in fraud incorporate fraudulent misrepresentation, the tort of deceit and equitable fraud. Equitable fraud takes in actual fraud and constructive fraud.  Constructive fraud includes undue influence, abuses of confidence, unconscionable bargains and fraud on a power.

Persons affected by a transaction tainted by fraud are entitled to the remedy of rescission - that is, the transaction is set aside, as consent has been induced by some false means. The transaction is voidable, rather than void.  Fraudulent misrepresentation in contract law also entitles a person to damages should loss be proven.

It has often been said in the cases that "Fraud unravels all" and a sharp distinction with other causes of action is drawn, namely negligence and incompetence: Paragon Finance plc v DB Thakerar & Co [1999] 1 All ER 400.

Lord MacNaghten stated in Reddaway v Banham [1896] AC 199, "Fraud is infinite in variety, sometimes it is audacious and unblushing; sometimes it pays a sort of homage to virtue, and then it is modest and retiring; it would be honesty itself if it could only afford it."

Usage: The transaction was tainted by undue influence and set aside on the basis of an equitable fraud.

Related Words: rescission; void ab initio; fraudulent misrepresentation; void transactions; voidable transactions; undue influence; abuses of confidence; restitutio in integrum; unconscionable bargains; fraud on a power; void ab initio.