Fraud vs Breach of Contract: Key Legal Differences in Spain

In the legal world, distinguishing between the crime of fraud and a simple breach of contract is fundamental. This differentiation has very relevant consequences, both at the procedural level and in terms of criminal or civil liabilities. In Spain, not every breach of contract constitutes a crime, nor should every contractual dispute be heard in criminal court.

In this article we will analyze in a practical and updated manner what is the difference between fraud and contractual compliance.

If you have been charged with a crime of fraud and it involves a breach of contract, having a fraud defense attorney will make the difference between an acquittal and a conviction.

What is the crime of fraud according to the Criminal Code in Spain?

The crime of fraud is regulated in Article 248 of the Spanish Criminal Code. It constitutes a classic figure within crimes against property, whose protection is essential in our legal system.

Understanding the definition and requirements for its application is the first step to differentiate it from a mere breach of contract.

Legal definition of fraud in Spain

According to the Criminal Code, commits fraud

What is the difference between criminal fraud and civil breach?

Distinguishing between criminal fraud and breach of contract is essential to know whether we are dealing with a criminal matter or, on the contrary, a civil one. Not all failures in contract performance should be taken to a criminal court.

The key lies in the existence or absence of prior deception and fraudulent intent at the time of contracting.

Criminal intent: deception from the beginning

For there to be criminal intent and, therefore, fraud, there must be antecedent or concurrent deception. The perpetrator, already when entering into the contract, knows that they do not intend to perform or cannot perform, but conceals this circumstance to mislead the other party.

The Supreme Court establishes that the active subject must feign a willingness to perform that does not actually exist.

Civil breach: subsequent non-performance without initial fraud

When we speak of civil breach, we refer to those situations where, at the time of signing the contract, there was indeed intention to perform. The breach comes later, due to supervening causes, negligence or economic impossibility.

In these cases, the conflict must be resolved through civil proceedings, without intervention of criminal law

Legal consequences of being convicted of fraud in Spain

When the court determines that we are not dealing with a simple breach of contract but with a fraud offense, the legal consequences are much more serious. Criminal Law not only seeks to repair the damage, but also to punish the fraudulent conduct.

Let us examine in detail what a conviction for fraud in Spain entails.

What does Article 248 of the Criminal Code state?

Article 248 literally provides:

«Those who, with intent to profit, use deception sufficient to produce error in another, inducing them to perform an act of disposition to their own or another’s detriment, commit fraud.» The penalty for basic fraud is 3 months to 3 years of imprisonment.

Furthermore, Article 250 establishes aggravating circumstances based on factors such as the amount of damage exceeding 50,000 euros, breach of trust, or if it affects essential goods. The penalty for aggravated fraud is 1 to 6 years of imprisonment.

Therefore, it is not enough to simply fail to comply with a contract. It is necessary to prove that the contract was the instrument of a fraudulent deception from the beginning or, in some cases, through supervening intent that seriously vitiated consent.

Civil liability arising from fraud

In addition to the criminal conviction, the perpetrator of the offense must i