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Simple English definitions for legal terms
collateral fraud
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A quick definition of collateral fraud:
Collateral fraud is when someone lies or hides important information to make someone else do something that hurts them. It's like tricking someone into doing something bad for them. It can be a crime or a type of unfair behavior in a contract. It's not nice to do collateral fraud because it hurts other people.A more thorough explanation:
Collateral Fraud
Collateral fraud is a type of fraud that involves intentional misrepresentation or deceptive behavior outside of a transaction or contract, which deprives one party of informed consent or full participation. It is also known as extrinsic fraud.
- A person convinces a litigant not to hire a lawyer or answer a lawsuit by dishonestly saying the matter will not be pursued.
- A seller of a property intentionally conceals information about the property's defects, causing the buyer to suffer financial loss.
These examples illustrate how collateral fraud involves deception that occurs outside of a transaction or contract, which causes harm to the other party. In both cases, the party committing the fraud intentionally misrepresents the truth to induce the other party to act to their detriment.