WHEN DOES A BREACH OF CONTRACT BECOME CRIMINAL FRAUD?
Dear clients and readers,
Our weekly post will be of interest to those foreign investors or residents in Spain affected by a breach of contract. (I.E., purchase, renovation works, company, etc.)
We would like, if we may, to share a landmark ruling from the Supreme Court (Criminal Chamber) 🏛️. This is very interesting for the way it addresses a fundamental issue in legal practice: the fine line between a breach of contract and the offence of fraud.
⚖️ In Supreme Court Ruling 327/2025, the High Court establishes when a breached contract ceases to be a civil matter and becomes a criminal offence.
Key points of the reasoning:
✅ Not every breach of contract is a crime. The “ultima ratio” principle applies. (A criminal complaint must be initiated in cases of extreme gravity). Fraud requires criminal intent from the outset: entering into a contract without any real intention of performing it. A contract can serve as a vehicle for fraud if it is used to induce a transfer of assets.
✅ To win a fraud claim, the victim must prove:
- A false statement or omission of a material fact. The criminal lied about something material to the deal, using false documents or statements to induce the contract or concealing important risks or defects that weren’t discoverable
- The person never intended to follow through
- The criminal knew it was false
- The victim relied on it
- The victim suffered damages as a result
✅ The victim will need evidence of intent, not just poor performance. Vague claims like “they lied to us” won’t cut it — you must show who said what, when, and how it affected your decision.
Remember, Spanish criminal Courts don’t want fraud claims used as a “bad faith” weapon in every contract case — they will dismiss weak fraud allegations quickly.
✅ Subsequent fraud is recognised: when, even if the contract was initially entered into lawfully. The fraud continues while maintaining the “appearance” of normality.
🔍 In a nutshell:
1. Criminal law does not punish mere non-compliance, but rather fraud in the intent to contract.
2. The victim cannot be expected to exercise “superhuman diligence”: the focus is on the deception, not on mistrust.
3. This ruling will be key for those who work with contracts, dispute resolution, or compliance
How BZN LEX International Lawyers Can Help
At BZN LEX International al Lawyers, we can effectively help you:
- Determine whether your claim falls within the category of fraud or breach
- Gather the right evidence for court or settlement
- File lawsuits against vendors, clients, and partners
- Defend you or your business against unfounded fraud allegations
📌 Whether you’re seeking damages or trying to exit a bad deal. We help you pursue the right strategy without overreaching.
HOW TO CONTACT US FOR FURTHER SPECIFIC ADVICE?
We hope you find this information useful. Remember that this is not intended to be specific legal advice, just a general overview. As independent lawyers, we can help you both by assisting you with all civil and criminal cases, as well as carrying out a comprehensive background legal analysis on your consultation or problem, if required.
Should you be interested in receiving more specific information or simply get an independent 2º opinion (either about this particular subject or any other), you can contact our firm in several ways:
1. Call us or preferably send us a WhatsApp now to (0034) 687 88 88 73.
2. Visit our website https://bestsolicitorsinspain.com/
You can also use our e-mail form at the top of the sidebar of your screen, or alternatively, you can send us an email to info@bestsolicitorsinspain.com
Our commitment. We’ll respond to your e-mail inquiry in less than 24 hours.
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Finally, thank you very much for your attention, and in case you might have any questions or doubts at all, again, please do not hesitate to contact us. We would like to stress the point that you will be in good hands, and you can be reassured that we will look after your interests in the most committed and professional way.
We look forward to helping you and the benefit of our “know-how”.
Kindest regards
Mr Oscar Ricor
“NON-PRACTISING ENGLISH SOLICITOR IN ENGLAND AND WALES”, under the “Solicitors Regulation Authority” (SRA) SRA number 519196 and practising Spanish Solicitor. BZN LEX INTERNATIONAL LAWYER
