3

I sort of intuitively knows that most lies are legal.

Someone asks me to visit him, I pretended to be busy, even though the truth is I just don't like the guy.

That seems legal.

But some lies are fraud.

Are there clear definition on why certain lies are acceptable and others are illegal?

Some definitions I read is that something is a fraud if the lie is done to get something.

Well, that's not really clear cut. If I said I am busy, for example, I am getting something, namely, I look less like a jerk.

So, what's the difference?

What kind of lies are legal, what kind of lies are illegal, what is fraud, and what is scam, and what's the differences between all those?

4

The legal definition of the most straightforward form of fraud (a direct fraudulent misrepresentation) is that the guilt person:

  1. Says something that is not true about a presently existing material fact which is not an opinion;
  2. With the intent that someone else rely upon that statement to their detriment;
  3. They do indeed rely upon that statement;
  4. Their reliance is justifiable; and
  5. Their justifiable reliance causes them damages.

A promise broken is not fraud unless it was made with a present intent not to fulfill the promise.

Generally, a statement about the future cannot be a basis for fraud unless it clearly implies something about a presently existing material fact that is not true.

In lieu of a fraudulent misrepresentation, there can also be fraudulent concealment which involves an omission of a presently existing material fact under circumstances when there was a duty to disclose it, with an intent to mislead that does justifiably mislead and causes damages.

Lots of lies don't qualify as actionable fraud including:

  1. Statements about immaterial facts.
  2. Statements of opinion (e.g. the house is worth $300,000) or about one's feelings.
  3. Promises about the future that you intend to keep and then don't.
  4. Predictions that don't pan out.
  5. Statements made believing, inaccurately that they are true.
  6. Ambiguous statements that are taken the wrong way and do mislead but weren't intended to mislead.
  7. Statements that weren't intended to be taken seriously or relied upon.
  8. Lies that aren't relied upon or that a reasonable person wouldn't have relied upon.
  9. Lies that don't cause economic harm, including lies that are disavowed before they cause economic harm. This includes lies told with the belief that they are in the best interests of a person who could be harmed by the truth (e.g. a child or a mentally unstable person or some who is so fragile that the truth could trigger physical harm).
  10. Lies that are relied upon an unintended recipient (e.g. you lie to a prospective business partner at dinner about something related to a business deal and someone who eavesdrops on the conversation relies upon it).
  11. Some lies told on behalf of and solely in the name of someone else (e.g. a false statement of a prospectus for an investment published solely in the name of the company offering the investment without attribution of who wrote it).
  12. Lies that are mandated by another greater legal duty (e.g. lies by a spy, a diplomat, a cop trying to catch a criminal - but not a prosecuting attorney, by a soldier).
  • Might be worth pointing out that many jurisdictions have consumer protection laws that prohibit deceptive and misleading conduct: this captures fraud but also includes things that don’t amount to lies. – Dale M Mar 6 '18 at 20:32
  • Fair point. I considered discussing those but didn't want to make an already complicated answer more complex. – ohwilleke Mar 7 '18 at 4:49
  • What about if some smart potential victim knew about the lie and didn't rely on the lie. Do we have attempted fraud? – user4951 Apr 22 '18 at 16:36
  • @J.Chang Civil lawsuits only remedy completed torts, not attempted torts. There could conceivably be criminal liability for an attempt to defraud that is unsuccessful. – ohwilleke Apr 22 '18 at 17:34
  • So someone that wants to defraud can keep doing it. If it works he gets money. If it fails no torts have been done yet. Is it a crime? – Sharen Eayrs Aug 23 '18 at 10:00

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.