Fraud, in the common acceptation of the word, an act or course of deception deliberately practiced with the view of gaining a wrong and unfair advantage. Its connotation is less wide than that of deceit, which is used of concealment or perversion of the truth for the purpose of misleading. Stratagems employed in war to deceive the enemy are not morally wrong; yet even in war it would not be right to practice fraud on him. Fraud is something which militates not only against sincerity and straightforward conduct, but against justice, and justice is due even to enemies.
The question of fraud is of special importance in the matter of contracts. It is of the essence of a contract that there should be an agreement of wills between the parties as to its subject-matter. Without such an agreement in all that is essential there can be no contract. Hence, if by fraud one of the parties to a contract has been led into a mistake about what belongs to its substance, the contract will be null and void. If a dealer in jewelry offers a piece of colored glass to a customer as a valuable ruby, and induces him to pay a large sum of money for it, the contract is invalid for want of consent. The customer wished to buy a precious stone, and he was offered glass. If one of the parties to a contract is fraudulently led into a mistake about something which is merely accidental to the contract and which did not induce him to enter into it, the contract will be valid and there is no reason for setting it aside. If a higher price or more favorable terms were obtained by means of the fraud, there was, of course, wrong done thereby, and if, in consequence, more than the just value was given, there will be an obligation to make restitution for the injustice. But there was no mistake about the substance of the contract, there was union of wills therein, and so, there is no reason why it should not stand. If, however, such a mistake, not indeed regarding the substance of the contract, but caused by the fraud of the other party, was the reason why the contract was entered into, there are special reasons why such a contract should not be upheld.
As there was agreement about the substance of the contract, this will, indeed, be valid, but inasmuch as the consent of the party who was deceived was obtained by fraud and would not otherwise have been given, the contract should be voidable at the option of the party deceived. It is a matter of importance for the public weal that no one should be able to reap benefit from fraud (Vemini fraus sua patrocinari debet), as canonists and moralists never tire of repeating. Moreover, the fraudulent party inflicted an injury on the other by inducing him by fraud to do what he would not have done otherwise. It is only equitable and right that one who has thus suffered should be able to rescind the contract and put himself again in the same position as he was in before—if that be possible. Contracts, therefore, induced by the fraud of one of the parties, even though there was no substantial mistake, are voidable at the option of him who was deceived, if the contract can be annulled. If the fraud was committed by a third person without the connivance of the other party to the contract, there will be no reason for annulling it.
Besides fraud committed against a person and against justice, canonists and moral theologians frequently mention fraud against law. One is said to act in fraud of the law when he is careful to observe the letter, but violates the spirit of it and the intention of the lawgiver. Thus one who is bound to fast would act in fraud of the Church‘s law if on a fasting day he undertook some hard and unnecessary work, such as digging, in order to be excused from fasting. On the other hand, there is no fraud against the law committed by one who leaves the territory within which the law binds, even if he do this with the intention of freeing himself from the law. He is at liberty to go and live where he pleases, and he cannot act fraudulently in doing what he has a right to do. And so, on a fast day which is only kept in some particular diocese, one who lives in the diocese may without sin leave it even with the intention of escaping from the obligation of fasting, and when he is once outside the limits of the diocese he is no longer bound by a purely diocesan law. There are two celebrated declarations of the Holy See which seem at first sight to contradict this doctrine. The first occurs in the Bull “Superna” of Clement X (June 21, 1670), where the pope says that a regular confessor may absolve strangers who come to him from another diocese from sins reserved therein unless he knows that they have come to him in fraud of the reservation. These words have caused great difficulty and have been variously interpreted by canonists and divines.
According to the common opinion they limit the power of the confessor only when the principal motive which induced the penitent to leave his diocese was to avoid the jurisdiction of his own pastor and to make his confession in a place where the sin was not reserved. By reserving the sin in question the ecclesiastical authority desired to compel a delinquent to appear before it and to receive the necessary correction; by leaving the diocese with a view to making his confession elsewhere_ the penitent would circumvent the law and make it nugatory: If he left the diocese from some other motive, and while outside took the opportunity to make his confession, he would not act in fraud of the law of reservation. Urban VIII (August 14, 1627) approved of a declaration of the Sacred Congregation of the Council according to which parties subject to the Tridentine law of clandestinity would not contract a valid marriage in a place where that law was not in force if they betook themselves thither with fraud. There was a similar difficulty as to the meaning of fraud in this decree. According to the more common view, the parties were guilty of fraud by the very fact of leaving the parish with the intention of contracting marriage without the assistance of the parish priest, whose right and duty it was to testify to the valid celebration of the marriage of his parishioners. This question, however, is now only of historical interest, as the law has been radically changed by the papal decree “Ne temere” (August 2, 1907) q. v.