Constructive fraud consists:

1) of a breach of duty which, without an actual fraudulent intent, gains an advantage to the person at fault or anyone claiming under that person, by misleading another to that person’s prejudice or to the prejudice of anyone claiming under that person; or

2) of an act or omission which the law specifically declares to be fraudulent without respect to actual fraud.

Constructive fraud arises from a breach of a duty which is owed because of a fiduciary, confidential, or other special relationship between the parties. A fiduciary or confidential relationship is one which induces the trusting party to relax the care and vigilance the party would ordinarily exercise. Constructive fraud is based on a relationship between the parties which gives rise to a duty of disclosure. Silence may be as misleading as a positive misrepresentation of fact. The suppression of a material fact which a party is bound in good faith to disclose, is equivalent to a false representation. One's implicit faith in another's honesty and integrity is insufficient to establish a fiduciary relationship as regarding constructive fraud.

[A fiduciary or confidential or other special relationship does not ordinarily exist when business persons deal with each other at arms length.]

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