Fraud is a knowing, intentional misrepresentation or concealment of a material fact when the misrepresentation or concealment (omission) is done to induce another person or entity to act to their detriment—such as by paying money for a product or service or investing in a company, venture, or other proposition.

Fraud is usually a tort—a wrongful act for which a person or entity that is the victim of the fraud may file a civil (noncriminal) lawsuit and recover money damages. But fraud may also be a criminal offense (crime) prosecuted under various state and federal laws (usually statutes).

Laws vary from state to state, but to prevail on a civil fraud claim, a plaintiff generally must show:

• the defendant made a material representation that was false;

• the defendant knew the representation was false or made it recklessly as a positive assertion without any knowledge of its truth;

• the defendant intended to induce the plaintiff to act upon the representation; and

• the plaintiff actually and justifiably relied upon the representation and suffered injury as a result.

The fourth element has two requirements:

• the plaintiff must show that it actually relied on the defendant's representation; and

• such reliance was justifiable.

The law regarding civil fraud claims may be located in a state’s statutes or in its court opinions (common law or case law).

In Vermont, fraud is recognized both as a tort for civil litigation and as a criminal offense. For a civil fraud claim, the plaintiff must prove that the defendant made a false material representation, knew it was false or was recklessly indifferent to its truth, intended to induce the plaintiff to rely on it, and that the plaintiff did in fact rely on it to their detriment. This reliance must have been both actual and justifiable. Vermont's laws on fraud can be found in state statutes as well as in common law established by court opinions. If the fraud is of a criminal nature, it is prosecuted under state criminal statutes, which define the elements of the offense and the potential penalties. The specific statutes and case law governing fraud in Vermont would provide detailed guidance on how these general principles are applied in the state.