Legal Definitions - ex dolo malo

Ex dolo malo is a Latin legal principle that translates to "out of fraud or bad faith." It signifies that a legal right or claim cannot be founded upon, or arise from, a person's own wrongful, fraudulent, or deceitful conduct. In essence, the law will not assist someone who seeks to benefit from their own illegal or dishonest actions.

• Example 1: Fraudulent Contract

  Imagine a business owner who intentionally provides false financial statements and exaggerated projections to a potential investor to secure a large investment. The investor, relying on these fraudulent statements, signs a contract and transfers a significant sum of money. Later, when the business fails due to the owner's mismanagement, the owner attempts to enforce a clause in the contract that would allow them to keep a substantial portion of the investor's money despite the business's collapse. A court would likely refuse to enforce this clause because the entire agreement was induced by the owner's fraud, meaning the owner's claim arises ex dolo malo.

• Example 2: Illegally Acquired Property

  Consider an individual who uses a sophisticated identity theft scheme to fraudulently transfer the deed of a valuable piece of land from its rightful owner into their own name. The scammer then attempts to sell the land to an unsuspecting third party. If the original owner discovers the fraud and challenges the transfer, a court would rule that the scammer never had a legitimate claim to the property because it was acquired through deceitful and criminal conduct. The scammer's attempt to assert ownership or sell the property would be rejected as arising ex dolo malo.

• Example 3: Insurance Claim Based on Arson

  Suppose a homeowner, facing severe financial difficulties, deliberately sets fire to their own house to collect insurance money. After the fire, they file a claim with their insurance company for the damages. During the subsequent investigation, it is discovered that the homeowner intentionally caused the fire. The insurance company would deny the claim, and a court would uphold this denial, because the damage was caused by the homeowner's own fraudulent and illegal act. The claim for insurance benefits, therefore, arises ex dolo malo.