Legal Definitions - fraude

Fraude refers to a deliberate act of deception or misrepresentation committed by one party during the execution or fulfillment of an existing contract, with the intent to gain an unfair advantage or cause harm to the other party.

In civil law, this concept focuses on dishonest actions taken while a contract is being carried out, rather than fraud that might have induced someone to enter the contract in the first place.

• Example 1: Construction Project

  Imagine a homeowner contracts with a builder to construct an addition using specific, high-grade materials, such as premium oak flooring and energy-efficient windows. During the construction process, the builder secretly substitutes cheaper, lower-quality laminate flooring and standard windows to cut costs, while still billing the homeowner for the premium materials as per the contract.

  This is an example of fraude because the builder is intentionally deceiving the homeowner about the quality of materials used during the performance of the construction contract, aiming to increase their profit at the homeowner's expense.

• Example 2: Software Development Agreement

  A company hires a software development firm to create a custom application, with the contract specifying that all code must be original and proprietary. During the development phase, the firm secretly incorporates significant portions of pre-existing, open-source code without proper disclosure or licensing, presenting it as their original work to meet deadlines and reduce development effort.

  This demonstrates fraude because the software firm is misrepresenting the originality and nature of the work delivered while fulfilling the development contract, potentially exposing the client to future legal issues or intellectual property claims.

• Example 3: Supply Chain Contract

  A restaurant chain contracts with a food supplier for a consistent delivery of organic produce from a certified farm. The supplier, facing a shortage from the specified organic farm, knowingly sources a portion of the produce from a conventional farm and mislabels it as organic to fulfill the order and avoid penalties for non-delivery, while still charging the organic price.

  This constitutes fraude as the supplier is deliberately misrepresenting the origin and quality of the goods during the performance of the supply contract, deceiving the restaurant chain and potentially impacting their brand reputation and customer trust.