constructive fraud

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Any of certain forms of unintentional deception or misrepresentation (compare fraud). The concept is applied by equity to those cases in which the courts will not enforce or will set aside certain transactions (e.g. contracts) because it is considered unfair or unconscionable for a person to insist on the transaction being completed. This unfairness may be inferred from the terms of the transaction (when these are such that no person with proper advice would have entered the transaction) or from the relationship of the parties (for example, that of solicitor and client or of trustee and beneficiary).

Subjects: Law.

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