What is the Difference Between Fraud and Concealment?

What is the Difference Between Fraud and Concealment?

Let’s say a pharmaceutical company intentionally produces a large quantity of a particular drug with the wrong ingredients without anyone noticing. These products sell out very quickly at a cheap rate (because they are substandard), and start to cause health problems for consumers. The root cause of the matter was eventually discovered and the case went to court. Do you think it would be a case of fraud or concealment? If you are not sure which one it is, then keep reading as we answer the question – “what is the difference between fraud and concealment?”

While at it, we will provide you with a table showing the meaning of these jargons and how they are different from each other.

Definition of Fraud

Fraud is defined as a deliberate falsification of facts. When a party intentionally falsifies a material fact and goes ahead to present it to another party who then acts on it and probably gets hurt in the process, it is viewed as fraud. There is usually an ulterior motive in such cases.

From the definition of fraud as stated above, it is clear that one party produces illegal information or material with the intention of depriving the other party of something that is valuable. Since this is a deliberate act and not an honest mistake, it may result in certain sanctions. In court, the perpetrator is said to have committed an offense under civil or criminal law.

Definition of Concealment

Concealment is simply defined as preventing the discovery of something. In this case, a material fact is covered up to avoid being known to another party or authority, which may lead to the distortion of a case. One thing to note in this case is that the act may not necessarily be deliberate.

Conventionally, the definition of concealment is similar to the definition of misrepresentation, except that in this case, the material fact is hidden. If a contract has been drawn up on the basis of this case, it may be breached according to specifications relevant to both parties. However, if the concealment has been done deliberately, it may result in the complete annulment of the contract and probably in a court sentence.

Fraud vs Concealment Comparison Table

Basis of Comparison Fraud Concealment
Meaning The intentional falsification of a material fact which is presented to another party who then acts on it and probably gets hurt in the process This is the covering up a material fact to avoid being known to another party or authority, which can lead to the distortion of a case
The extent of truth Here, there is an ulterior motive – money, human-right deprivation, business advantage, etc. Therefore the statement is false There may or may not be an ulterior motive if it turns out to be an innocent misinformation
Claim over damages The affected party has the right to claim damages The affected party may not have the right to claim damages
Effects on contract Renders a contract void and may result in punishments under the law May not necessarily render a contract void, especially if the misstatement was innocent

Conclusion of the Main Difference Between Fraud vs Concealment

The basic key point to be retained from this comparison is that fraud is intentional while concealment may be innocent. This difference affects how a case of fraud vs concealment is perceived.

From all that has been said, it is obvious that the instance given above is a typical case of fraud. The act was committed intentionally, probably with the intention of making more money or deliberately hurting the consumer.