Intrinsic fraud is an intentionally false representation that goes to the heart of what a given lawsuit is about, in other words, whether fraud was used to procure the transaction. (If the transaction was fraudulent, it probably does not have the legal status of a contract.) Intrinsic fraud is distinguished from extrinsic fraud (a/k/a collateral fraud) which is a deceptive means of keeping a person from discovering and/or enforcing legal rights. It is possible to have both intrinsic and extrinsic frauds. The U.S. Supreme Court defined and distinguished intrinsic from extrinsic fraud in its unanimous 1878 ''

United States v. Throckmorton ''United States v. Throckmorton'' (98 United States Reports, U.S. 61) is an 1878 decision of the U.S. Supreme Court on civil procedure, specifically ''res judicata'', in cases heard at equity (law), equity. A unanimous Court affirmed an appeal of ...

'' decision, written by Justice

Samuel Freeman Miller Samuel Freeman Miller (April 5, 1816 – October 13, 1890) was an American lawyer and physician who served as an associate justice of the U.S. Supreme Court from 1862 until his death in 1890. Early life, education, and medical career Born ...

. It described intrinsic fraud as "any matter which was actually presented and considered in the judgment assailed", declining to grant equitable relief to the federal government over an allegation that a settler's land claim in Mexican-ruled California had been secured two decades earlier after California became a U.S. territory through falsified documents and perjured affidavits. Even though the issue had not been raised at the original trial, the Court held that the government had had ample opportunity to exercise

due diligence Due diligence is the investigation or exercise of care that a reasonable business or person is normally expected to take before entering into an agreement or contract with another party or an act with a certain standard of care. It can be a ...

and investigate the evidence. During a

trial In law, a trial is a coming together of parties to a dispute, to present information (in the form of evidence) in a tribunal, a formal setting with the authority to adjudicate claims or disputes. One form of tribunal is a court. The tribun ...

perjury Perjury (also known as foreswearing) is the intentional act of swearing a false oath or falsifying an affirmation to tell the truth, whether spoken or in writing, concerning matters material to an official proceeding."Perjury The act or an inst ...

forgery Forgery is a white-collar crime that generally refers to the false making or material alteration of a legal instrument with the specific intent to defraud anyone (other than themself). Tampering with a certain legal instrument may be forbi ...

, and

bribery Bribery is the offering, giving, receiving, or soliciting of any item of value to influence the actions of an official, or other person, in charge of a public or legal duty. With regard to governmental operations, essentially, bribery is "Co ...

of a

witness In law, a witness is someone who has knowledge about a matter, whether they have sensed it or are testifying on another witnesses' behalf. In law a witness is someone who, either voluntarily or under compulsion, provides testimonial evidence, e ...

constitute

fraud In law, fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud can violate civil law (e.g., a fraud victim may sue the fraud perpetrator to avoid the fraud or recover monetary compen ...

s that might have been relieved by the

court A court is any person or institution, often as a government institution, with the authority to Adjudication, adjudicate legal disputes between Party (law), parties and carry out the administration of justice in Civil law (common law), civil, C ...

. Such actions will usually lead to a

mistrial In law, a trial is a coming together of parties to a dispute, to present information (in the form of evidence) in a tribunal, a formal setting with the authority to adjudicate claims or disputes. One form of tribunal is a court. The tribunal ...

being declared and after any penalties for the involved parties a new trial will take place on the same matter. Two types of intrinsic fraud in contract law are ''fraud in the inducement'' and ''fraud in the factum''. ''Fraud in the factum'' is a

legal Law is a set of rules that are created and are law enforcement, enforceable by social or governmental institutions to regulate behavior,Robertson, ''Crimes against humanity'', 90. with its precise definition a matter of longstanding debate. ...

defense, and occurs where A signs a contract, but either does not realize that it is a contract or does not understand the nature of the contract, because of some false information that B gave to A. ''For example,'' if John tells his mother that he is taking a college course on handwriting analysis, and for his homework, he needs her to read and sign a pretend deed. If Mom signs the deed believing what he told her, and John tries to enforce the deed, Mom can plead "fraud in the factum." ''Fraud in the inducement'' is an equitable defense, and occurs when A signs a contract, knowing that it is a contract and (at least having a rough idea) what the contract is about, but the reason A signed the contract was because of some false information that B gave to A. ''For example,'' if John tells his mother to sign a deed giving him her property, Mom refuses at first, then John explains that the deed will be kept in a safe deposit box until she dies. If Mom signs the deed because of this statement from John, and John tries to enforce the deed prior to Mom's death, Mom can plead "fraud in the inducement."

References

Contract law Fraud {{law-term-stub

See also

References