Constructive fraud is characterized by which of the following?

• A. Intent to deceive
• B. No intent to harm or mislead
• C. Direct deception
• D. Material misrepresentation

Answer: (B)

Constructive fraud centers on the conduct and its effect rather than a deliberate plan to deceive. It arises when someone breaches a duty or makes a misrepresentation with reckless disregard or negligence, and someone is harmed as a result. The key point is that intent to deceive is not required for liability—the wrongdoer can be liable even without trying to mislead. That’s why this option, describing no intent to harm or mislead, best fits constructive fraud. In contrast, actual fraud requires a deliberate intent to deceive, direct deception implies a conscious lie, and while a material misrepresentation is part of fraud, it doesn’t by itself capture the absence of the intentional mindset that defines constructive fraud.