139. Fraud is a false representation of a material fact, or nondisclosure of a material fact under such circumstances that it amounts to a false representation, made with knowledge of its falsity, or in reckless disregard of whether it is true or false, or as of personal knowledge, with the intention that it shall be acted upon by the other party, and which is acted upon by him to his injury. In detail:

(a) There must, as a rule, be a false representation, and not a mere nondisclosure; but nondisclosure or concealment is equivalent to a false representation -

(1) Where active steps are taken to prevent discovery of the truth.

(2) Where, though the representation made is true as far as it goes, the suppression of facts renders it in fact untrue.

(3) Where, under the circumstances, there is a duty to disclose the facts suppressed, so that failure to disclose them is an implied representation that they do not exist.

(b) The representation must be of a past or existing fact; and therefore fraud cannot result from -

(1) Expressions of opinion, belief, or expectation.

(2) Promises or expressions of intention. A representation, however, that a certain intention exists, when it does not exist, is a false representation of an existing fact.

(3) Representations as to the law, as a rule.

(c) The representation must be of a material fact.

(d) The representation must be of such a character, or must be made under such circumstances, that the other party has a right to rely on it. Fraud, therefore, cannot be predicated upon -

(1) Commendatory expressions as to value, prospects, and the like.

(2) False representations in cases where the means of knowledge are at hand, but the other party does not use them (in some jurisdictions).

(e) The representation must be made with knowledge of its falsity. It is regarded as "knowingly" false - (1) If actually known to be false.

(2) If made in reckless disregard of whether it is true or false.

(3) If the fact is susceptible of knowledge, and the representation is made as of the party's personal knowledge (in most jurisdictions).

(f) The representation need not be made directly to the other party, but it must be intended to reach him, and to be acted upon by him.

(g) The representation must deceive; that it, it must be relied upon by the other party, and must induce him to act. (h) It must result in injury.