LEGAL PRINCIPLE: EVIDENCE LAW-Fraudulent Misrepresentation – Definition of Fraud
PRINCIPLE STATEMENT
Fraud does not here mean deceit or circumvention; it means an unconscientious use of the power arising out of these circumstances and conditions; and when the relative position of the parties is such as prima facie to raise this presumption, the transaction cannot stand unless the person claiming the benefit of it is able to repel the presumption by contrary evidence, proving it to have been in point of fact, fair, just and reasonable.
RATIO DECIDENDI (SOURCE)
"Fraud does not here mean deceit or circumvention; it means an unconscientious use of the power arising out of these circumstances and conditions; and when the relative position of the parties is such as prima facie to raise this presumption, the transaction cannot stand unless the person claiming the benefit of it is able to repel the presumption by contrary evidence, proving it to have been in point of fact, fair, just and reasonable."
EXPLANATION / SCOPE
Fraud in equitable contexts means unconscientious use of power arising from the parties’ relative positions—not necessarily deceit. Where circumstances raise a presumption of fraud, the transaction cannot stand unless the beneficiary rebuts the presumption by proving it was fair, just, and reasonable. This shifts the evidentiary burden. The principle protects parties in unequal bargaining positions (e.g., fiduciary relationships). It does not require proof of intentional deception; inequitable conduct suffices. The court examines whether the transaction is substantially fair. This definition expands fraud beyond common law deceit to cover equitable fraud—unconscionable conduct. The burden shifts to the party benefiting from the transaction.