Fraud means acting in bad faith, but all actions of bad faith are not fraudulent.

In divorce actions, most fraud claims stem from an inducement to marry, separation agreements and evidence at trial. In order to upset an earlier judgment, the fraud must be material, and the victim must prove substantial harm that could not be detected with reasonable care. Fraud and misrepresentation can be grounds for an annulment.

Fraud can be perpetrated when one party fails to tell another the "whole truth."

In divorce, fraud usually might also be connected with the hiding of assets and forms of economic misconduct and also be accompanied by perjury and lying.

When one spouse discovers the other has hidden marital assets or lied about the value, the victim has a number of remedies. If the divorce is not final, he or she can raise the issue in the divorce case.

If the division has been made, the victim may in some cases turn to the agreement itself. Increasingly separation agreements and even divorce decrees contain a residuary clause that allocates nondisclosed assets. This can exercised with a motion to enforce.

Absent the residuary clause, a party may move to upset the agreement by a motion alleging fraud, and beyond that, a growing number of courts now recognize that the victim spouse may bring an action on the common law grounds of fraud. This is a tort, and generally the elements of fraud for a marital tort are 1) misrepresentation, 2) a fraudulent utterance, 3) an intention by the maker to induce a party to act, 4) reasonable reliance by the recipient upon the misrepresentation, and 5) damage to the recipient.

A party may not allege fraud merely because he or she later becomes unhappy with the property settlement, and settlement, with few exceptions, should be considered set in stone.

In general, the spouse who prevails must convince the court that "equities weigh in his or her favor," and outcome is far from clear because "equities are not usually crystal clear." To prove fraud, the moving spouse must prove that he or she relied on the misrepresentation, and courts consider due diligence exercised by the moving party. Thus, misrepresentation of asset values on the part of one spouse or nondisclosure of assets does not necessarily constitute fraud, and the burden of proof falls on the party alleging fraud and must be clear and convincing.

Allegations of fraud and duress may turn on questions of what is called extrinsic versus intrinsic fraud. Extrinsic fraud is fraud perpetrated against a court; intrinsic fraud is fraud committed against a party. For example, in a 1994 California appeals case, a former wife proved extrinsic fraud in a case where her husband persuaded her to sign what was described as an "Appearance, Stipulation and Waiver" that divided property and allowed him to divorce her without notification. He then lived with her for 10 years before she discovered the fraud!

Some jurisdictions allow judgments to be attacked for intrinsic fraud for a much shorter time after the ruling than they do in cases of extrinsic fraud. Many states have adopted rules modeled on Rule 60(b) of the Federal Rules of Civil Procedure, which requires that a motion be filed within one year of the judgment.

Allegations of fraud may also involve questions of duress, which normally includes a threat or some form of coercion. Yet even a death by an estranged husband failed to persuade a Missouri appellate court that duress has been established because the formerly divorced woman’s "prior experience with property settlement negotiations" made the court believe "she was fully aware of her property rights and the effects of signing the separation agreement." (In fairness, the case may have also turned on a problem common in many divorce cases, that is, he said-she said, without any independent evidence).

See also Duress.

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