In many legal disputes, particularly those involving financial transactions, the line between a civil disagreement and criminal fraud can appear blurred. This is especially true when the accused presents a signed contract as evidence that the matter is purely civil. However, Egyptian criminal law provides a clear distinction: fraud is not erased by the presence of a contract. Instead, it hinges on the intent behind the agreement and the conduct of the parties at the time of its conclusion.

A civil dispute typically arises when both parties enter a contract in good faith, but one fails to deliver on their obligations due to delay, negligence, or misinterpretation. The remedy for such cases lies in civil court, where the injured party may seek compensation or enforcement. There is no criminal liability unless it is proven that the defaulting party had dishonest intentions from the outset.

In contrast, criminal fraud, as defined under Article 336 of the Egyptian Penal Code, is established when one party uses deceitful means to unlawfully obtain another’s money or property. Fraud may involve false promises, forged documents, manipulation, or presenting fake identities or powers. What differentiates fraud from a civil breach is the presence of fraudulent intent from the beginning. The fraudster never planned to fulfill the agreement, they used the contract as a tool of deception, not as a genuine legal commitment.

Egyptian courts, particularly the Court of Cassation, have firmly recognized that a criminal offense may still be committed even if a contract exists between the parties. The judiciary looks beyond formality to substance, investigating whether the accused entered into the contract with a premeditated plan to deceive and defraud. Courts have repeatedly ruled that if the contract itself was used as a means to commit the crime, it becomes part of the evidence of fraud rather than a shield against criminal liability.

This legal reasoning is especially important in cases where fraudsters use formal-looking agreements to defraud investors, buyers, or service recipients. For example, a person may purport to sell property they do not own, or promise to deliver services they never intended to provide, all under the cover of a legally executed agreement. If the facts establish that the accused had no intention of fulfilling the contract and only used it to obtain money or assets by deceit, criminal liability is triggered regardless of the paper trail.

Practically, this distinction plays a critical role in whether a complaint is pursued through criminal channels or limited to a civil claim. Prosecutors will examine the behavior of the parties, the sequence of events, the presence of forged or misleading documents, and communications that suggest bad faith. A well-drafted contract will not protect someone who entered it fraudulently. On the contrary, it may reinforce the charge if it is shown to have been used deliberately to facilitate the deception.

Victims of fraud should act quickly to preserve evidence, report the matter to the authorities, and engage legal counsel who understands the criminal and civil dimensions of such cases. Fraud disguised as a civil contract is increasingly common, and only a thorough legal strategy can ensure that justice is served.

At Ehab Yehia Law Firm, we routinely represent clients in such complex matters where criminal conduct is concealed behind contractual forms. Our approach focuses on uncovering fraudulent intent, supporting victims in filing criminal complaints, and ensuring their financial interests are protected through both criminal restitution and civil remedies.