Case Study Of Mr. Li’s Contract Fraud

Contract fraud is defined as intentional misrepresentation of a material factduring the process of forming and pursuing a contractual agreement with the intent todeceive or defraud the other party. Contract fraud occurs only at the circumstance thatone party knowingly misrepresented a material fact. In order to prove fraud, it alsomust be shown that the part intent to deceive or defraud the other party. Therefore,the key to identify contract fraud is to confirm that one party has deceived or defraudthe other party under contract law and to evidence that one party has intentionallymisrepresented the material fact of the other party. Similarities exist among contractdefraud, avoidance of credit and civil fraud. Thus it requires careful distinction offraud from non-fraud. In the content of contract defraud, it starts to cause actual losswhen one party takes action to deceive or defraud, thus serving as starting time foraccurate calculation of crime income and sentencing discretion. To adequatelyaccount for the damage, the actual income of the crime and the loss of the victim needbe combined for final calculation of crime income. For example, Mr. Li was in thecontract with Mr. Chen to jointly develop molybdenum and nickel mining. Mr. Lifraudulently prospect contracts with others and defraud Mr. Chen to payRMB12,000,000. After taking some actions of the contract, Mr. Li knowinglymisrepresented or splurged the remaining amount paid from Mr. Chen. Analysis of theentire case and Mr. Li’s performances showed no evidence that Mr. Li was issued theprospecting and mining rights implemented in the contract. Neither of prospecting andmining action was taken. Thus Mr. Chen constituted a contract fraud. The crimeincome was appropriately calculated after taking into account the actual loss of Mr. Li.In alignment with the law, the case was identified as a contract fraud after manyperspectives of efforts including the specific case analysis, interpretation, andcombination with the legal spirit, and understanding of the nature of contract fraud,constitutes conditions and practices.