Fraud and Contract Fraud

In a rule of law society, understanding legal knowledge and clarifying the boundaries of different crimes are important foundations for protecting one's own rights and maintaining social order. Fraud and contract fraud, as common types of property crimes, have both similarities and significant differences in many aspects. This article will delve into these two types of crimes, helping everyone to accurately grasp their legal boundaries, while providing practical prevention guidelines.

According to Article 266 of the Criminal Law of the People's Republic of China, fraud refers to the act of obtaining large amounts of public or private property by fabricating facts or concealing the truth with the purpose of illegal possession. Essentially, the crime of fraud is an infringement of ownership of public and private property. The perpetrator uses deceptive means to mislead the victim and dispose of their own property based on this misconception, thereby achieving the goal of illegally possessing someone else's property.

（2） Analysis of Constituent Elements
Subjective element: The crime of fraud is manifested subjectively as direct intent and has the purpose of illegally possessing public or private property. This means that the perpetrator knew from the beginning that their behavior was deceptive, but actively pursued the result of illegally possessing someone else's property. For example, A fabricates himself as a senior executive of a well-known enterprise and borrows money from B under the pretext of investing in a project, but in reality, A has no intention of investing in a project and its purpose is to defraud B of their money. This behavior fully reflects the subjective intention and illegal possession purpose of the crime of fraud.
Objective requirement: Objectively manifested as the use of fraudulent methods to obtain large amounts of public and private property. Fraudulent behavior takes various forms, including fabricating facts and concealing the truth. Fictitious facts refer to the fabrication of objectively non-existent facts to make the victim believe them to be true; Concealing the truth refers to concealing objective facts that exist, causing the victim to fall into a mistaken understanding. Whether it is fabricating past, present, or future facts, as long as it can cause the victim to have a wrong understanding and make property disposals, it belongs to fraudulent behavior. For example, C falsely claimed to have a batch of low-priced high-quality electronic products for sale, attracting D to purchase, but in reality, C did not have this batch of goods at all. This is a typical behavior of fabricating facts to defraud property. At the same time, fraud of public and private property must reach a relatively large amount to constitute a crime. According to relevant judicial interpretations, the standard for "relatively large amount" may vary in different regions, but generally ranges from 3000 yuan to over 10000 yuan.
2、 Contract Fraud Crime: Concept and Constituent Elements
（1） Definition and Connotation
The crime of contract fraud refers to the criminal act of fraudulently obtaining property from the other party by fabricating facts, concealing the truth, setting traps, and other means during the signing and performance of a contract with the purpose of illegal possession. The amount involved is relatively large. The crime of contract fraud not only infringes on the ownership of public and private property, but also disrupts the state's management order of economic contracts and disrupts the normal market economic order. Its social harm is more serious than that of general fraud crimes.
（2） Analysis of Constituent Elements
Subjective requirement: The perpetrator is also required to have direct intent and the purpose of illegally possessing the property of the other party. In contract fraud cases, criminals often have malicious intentions from the beginning of signing the contract, attempting to cover up their illegal possession of others' property through the legal form of the contract. For example, a certain company fabricated that it had advanced production technology and strong financial strength, signed raw material procurement contracts with suppliers, and refused to pay for the goods after receiving them. The company had no sincerity in fulfilling the contract from the beginning, and its subjective intention and illegal possession purpose were very obvious.
Objective requirements: manifested as the act of fabricating facts and concealing the truth during the signing and performance of the contract, defrauding the other party of property, and the amount reaches a relatively large standard. Common ways of behavior include: signing contracts in the name of fictitious units or impersonating others; Using forged, altered, or invalidated bills or other false property certificates as collateral; Without actual ability to perform, but using the method of first performing a small contract or partially performing a contract to deceive the other party into continuing to sign and perform the contract; Evading and hiding after receiving goods, payment, advance payment, or collateral property from the other party; And using other methods to defraud the other party of their property. For example, if Wu forges the company's business license and bank fund certificate, signs an engineering contract with himself, collects his own engineering deposit and flees, then Wu's behavior fully meets the objective elements of contract fraud.

The object of the crime of fraud is a single object, namely the ownership of public and private property, and its essence is the illegal possession of other people's property. The object of the crime of contract fraud is complex, which not only infringes on the ownership of public and private property, but also violates the state's management order of economic contracts. This is because contracts play an important role in the market economy, and contract fraud not only damages the property interests of the contracting parties, but also disrupts the normal operation order of the market economy, affecting the safety and stability of market transactions.
（2） The objective manifestations of crime are different
The fraudulent means of the crime of fraud are relatively broad and there are no specific restrictions on the scope of the behavior. As long as the perpetrator uses fictitious facts and conceals the truth to defraud others of their property, it may constitute the crime of fraud. The fraudulent behavior of contract fraud must occur during the process of signing and performing the contract, and is closely related to the content of the contract. It is a fraudulent behavior carried out using the form of the contract. For example, Geng defrauded Xin of his money by selling fake antiques on the street, which constitutes fraud; If Geng and Xin sign an antique sales contract, and during the performance of the contract, Geng delivers fake antiques to Xin by impersonating real antiques, in order to defraud Xin of his payment, this behavior constitutes the crime of contract fraud.
（3） Different criminal subjects
The subject of fraud can only be natural persons, and units cannot become the subject of fraud. The subject of contract fraud can be either a natural person or a company. In practice, some enterprises or units may use the name of the unit to sign contracts for fraud in order to seek illegal benefits. This behavior not only damages the interests of other market entities, but also brings serious damage to the market economic order.
（4） Different standards for filing and prosecuting cases
In terms of filing and prosecution standards, contract fraud is generally higher than fraud. Specific regulations have been made for the filing and prosecution standards of fraud and contract fraud in different regions based on factors such as local economic development level. For example, in some regions, the filing and prosecution standard for fraud may be 3000 yuan, while the filing and prosecution standard for contract fraud may be 20000 yuan. This also reflects that the law takes into account the differences in the degree of social harm and the characteristics of criminal behavior when regulating the two types of crimes.
4、 Case analysis in judicial practice
（1） Analysis of Fraud Cases
Case: Zhang San falsely claimed to know the director of the admissions office of a certain university and could help Li Si's child apply for a "special enrollment quota" at the university, but he needed to pay 100000 yuan for the "activity fee". Li Sixin thought it was true and handed over 100000 yuan to Zhang San. However, Zhang San disappeared without a trace after receiving the money.
In this case, Zhang San fabricated the fact that he knew the director of the college admissions office who could handle special enrollment quotas for the purpose of illegal possession, which led to Li Si's erroneous understanding and disposal of his own property, meeting the constitutive elements of fraud. Zhang San's behavior did not involve the signing and performance of the contract, but simply used deceptive means to defraud others of their property, therefore it should be recognized as the crime of fraud.
（2） Case analysis of contract fraud
Case: Company A forged financial statements and performance certificates and signed a 5 million yuan equipment procurement contract with Company B. The contract stipulates that Company B shall make a prepayment of 2 million yuan, and Company A shall deliver the equipment within 30 days after receiving the prepayment. B company paid the advance payment as agreed in the contract, but A company did not prepare to deliver the equipment after receiving the payment. Instead, they used the advance payment to repay the company's debts and distribute dividends to shareholders. Subsequently, the company's responsible person went missing.
In this case, Company A, with the purpose of illegal possession, fraudulently obtained advance payment from Company B by forging financial statements and performance certificates and other fictitious facts during the signing and performance of the contract. Its behavior not only infringed on Company B's property ownership, but also disrupted the order of contract management in the market economy, which meets the constituent elements of the crime of contract fraud and should be recognized as the crime of contract fraud.
5、 A Practical Guide to Preventing Fraud
（1） Enhance legal awareness and strengthen risk prevention capabilities
Understanding the relevant legal knowledge of fraud and contract fraud, clarifying the constituent elements and common methods of these crimes, is the foundation for preventing fraud. Only by knowing what is legal behavior and what is fraudulent behavior can one remain vigilant in daily life and economic activities, and not easily fall for scams. At the same time, it is important to establish correct values, avoid seeking small gains, and avoid falling into fraud traps due to blind pursuit of benefits.
（2） Handle contract signing and performance with caution
Before signing a contract, it is necessary to conduct a comprehensive investigation and understanding of the other party, including their subject qualifications, credit status, business conditions, etc. You can obtain the true information of the other party by querying business registration information, credit reports, on-site inspections, and other methods. Carefully review the contract terms to ensure that the contract content is clear and specific, with equal rights and obligations, and to avoid signing contracts with loopholes or traps. In the process of contract performance, one must strictly fulfill their obligations in accordance with the contract agreement, while closely monitoring the performance of the other party. If any abnormal behavior or potential breach of contract risks are found, timely measures should be taken to protect one's legitimate rights and interests.
（3） Strengthen personal information protection and prevent information leakage
The leakage of personal information is often an important prerequisite for fraudsters to commit fraud. In daily life, pay attention to protecting personal information, and do not disclose your name, ID card number, contact information, bank account and other important information to strangers. When using the Internet, pay attention to protecting personal privacy, avoid entering personal information on unsafe websites, treat various marketing calls and short messages with caution, and do not easily click on unknown links or download software from unknown sources.
（4） Consult professionals or report to the police in a timely manner when encountering suspicious situations
If encountering suspicious situations in daily life or economic activities, such as unreasonable demands, abnormal behavior, or doubts about contract terms, do not easily believe or make decisions. Instead, consult lawyers, legal experts, or relevant institutions in a timely manner to listen to their opinions and suggestions. If it is confirmed that you have been scammed, you should immediately report to the police, provide detailed clues and evidence, assist the police in investigating, and try to recover your losses as much as possible.
Although there are similarities between fraud and contract fraud in some aspects, through the analysis of their concepts, constituent elements, differences, and judicial practice cases, we can clearly grasp their legal boundaries. In daily life and economic activities, we need to raise awareness of prevention, take effective preventive measures, and avoid becoming victims of fraud. At the same time, once fraudulent behavior is discovered, it is necessary to promptly use legal weapons to safeguard one's legitimate rights and interests, and jointly create a safe and trustworthy social environment and market economic order.

Lawyer Introduction

Zhou Cao
Phone: 19921671031
Email: zhouhe@gcls.cn