In judicial practice, there are different ways to handle the issue of selling one product twice. Some are handled as civil disputes, while others are punished based on criminal convictions. Does selling one product twice constitute fraud? The essence of the crime of fraud lies in the illegal possession of someone else's money. If the perpetrator falsely claims to have goods and collects payment from the buyer without any goods to deliver, and then illegally takes the payment as their own, it naturally constitutes the crime of fraud. However, in practice, there are different manifestations and solutions for selling one product at a time for different reasons. Whether it constitutes fraud depends on the judgment of comprehensive factors. Below, the author will explore in detail the elements that may affect the composition of a crime.

1、 Did the perpetrator disclose all the details of the transaction to each buyer

The basic behavioral pattern of fraud is "fabricating facts and concealing the truth". The sale of one item and two sales involves multiple parties involved in the transaction, and whether the perpetrator clearly indicates to each buyer that all transactions are the first factor in determining whether they have an illegal possession purpose.

If the perpetrator clearly informs all the buyers involved in the transaction, especially the buyers involved in the subsequent transaction, it indicates their sincerity and behavior in resolving the dispute. Correspondingly, when each buyer understands the entire transaction situation, they will inevitably have corresponding and resolving actions on how to handle it, such as terminating the contract, stopping payments, or demanding a refund of the payment. No matter who the final goods are delivered to, other buyers can also stop losses or recover losses in a timely manner. For example, the perpetrator has already signed a house sales contract with Party A, but later felt that the sale was too low. They then signed a sales contract with Party B and informed them of the fact that they had signed the contract. The act of truthfully informing Party B will inevitably prompt Party B to conduct civil transactions more cautiously and resolve the issues of the two contracts in a legal and reasonable manner.

On the contrary, if the perpetrator does not disclose the truth and deceives each other among the buyers, causing them to mistakenly believe that they are the only trading party. The perpetrator may have the intention of illegal possession, using the lack of information exchange to illegally occupy the payment of various buyers.

So, whether the perpetrator informed each buyer of the transaction facts is the first element in determining whether it constitutes fraud. When the perpetrator clearly informs all parties of the transaction facts, it indicates their intention to resolve the dispute and also implies that there will be a follow-up plan to resolve the dispute. Regardless of the subsequent outcome of this matter, from the perspective of criminal composition, the perpetrator has no subjective intention of fraud.

2、 The perpetrator continues to engage in transactional activities with others after the delivery of the goods

Whether selling one product twice constitutes fraud can also be judged from the delivery status of the goods. The intentional illegal possession of the goods by the perpetrator is not yet apparent in the case of one sale before delivery. If the perpetrator continues to engage in transactions with others after the delivery of the goods, then the intention of fraud is obvious.

Before the delivery of the goods, the parties shall sign two or more sales contracts, and the actual performance of which contract shall be subject to the delivery of the goods. For sales contracts that cannot deliver goods, they can be resolved by terminating the contract, returning the deposit, and compensating for breach of contract. Of course, the perpetrator may also sign multiple sales contracts and collect payment before delivering the goods, only delivering to one party. Whether signing multiple sales contracts before delivering goods constitutes fraud depends on a comprehensive assessment of other behaviors.

If the perpetrator continues to transact with other buyers after the delivery of the goods, the intention of fraud is more obvious. Because after the delivery of the goods, the actor has no more goods to deliver, unless the goods are retrieved from the previous buyer, which requires the consent and cooperation of the previous buyer and is beyond the actor's control. For example, the perpetrator has already sold the house to Party A and completed the transfer of ownership. At this point, if the perpetrator sells the house to Party B again, it is obviously impossible to fulfill the contract. Continuing to engage in buying and selling transactions with others in the absence of goods in the hands of the perpetrator is an act of "fabricating facts and concealing the truth". If the buyer is deceived and delivers the payment, the fraudulent act is complete.

So, whether the signing of multiple sales contracts by the parties occurred before or after the delivery of the goods is also an important factor. Signing multiple contracts before delivery carries a possibility of innocence, while continuing transactions after delivery essentially constitutes fraud.

3、 Selling one product twice is reflected in signing the contract or receiving payment

If the perpetrator only signs the contract and does not receive payment, then the intention of fraud is not obvious. If the perpetrator not only signed a contract, but also received two or even more payments, then the intention of fraud is obvious.

The perpetrator has signed sales contracts with multiple counterparties, but has not yet received payment or has only received a deposit. At this point, the perpetrator can also treat the sale of one product and two sales as a civil dispute, terminate the contract with the other party, and return the deposit. At this point, the illegal possession intention of the perpetrator is not yet apparent, as the contract has only been established but has not yet been fulfilled. Both parties can terminate it through negotiation.

But if the perpetrator receives payments from two or more people, the intention of fraud is obvious. If the perpetrator has no intention of illegal possession, they should only receive one payment. If two or more payments are collected simultaneously, there is a possibility of fraud. If two payments are received successively, the payment from the previous buyer should be refunded before collecting the payment from the subsequent buyer. Because the delivery of payment means the completion of performance, it is difficult to terminate the contract and restore the original state at this time, and the consent and cooperation of the other party to the contract must be obtained. So, if the perpetrator does not have the intention of illegal possession, they should not receive more than two payments.

However, collecting two or more payments does not necessarily mean fraudulent behavior. For example, in the case previously handled by the author, Company A signed two sales contracts and received two payments for a batch of gasoline with its counterparties, Company B and Company C, in order to conduct financing trade. However, the controlling companies A1 and A2 of the perpetrator purchased gasoline again, and all the sales contracts were signed on the same day. The trading mode is shown in the following figure:

From the surface of this transaction, Company A signed two sales contracts and received two payments, but the problem is that Company A took over the two sales contracts and became the next company of Company B and Company C. In this way, no matter how many batches of gasoline exist, both Company B and Company C will not fail and will receive corresponding payments. This trading mode has lasted for many years, but in 2020, the COVID-19 led to a sharp drop in oil prices, and Company A could not continue this mode when its capital chain was broken. After B and C companies paid for the goods, they did not receive payment from A1 and A2 companies. Instead, when they tried to obtain gasoline, they found that there was only one batch of goods. They accused A company of contract fraud by selling one batch of goods twice.

The author believes that the behavior of Company A does not constitute the crime of contract fraud, because Company A's so-called "one product, two sales" is only a superficial phenomenon. Company A has arranged a second party for every sales contract, so that the transaction can continue. According to this model, Company B and Company C will not run out of money or goods. However, due to uncontrollable unexpected factors such as the pandemic, Company A is unable to continue making payments, which is a civil dispute that should be resolved through civil litigation. The crime of contract fraud should be committed by the perpetrator with the intention of illegal possession from the beginning, in order to fabricate facts, conceal the truth, and defraud the other party of money. Obviously, Company A's inability to fulfill its obligations was caused by unexpected factors, which constitutes a civil dispute rather than a criminal offense.

4、 Has the actor returned the unfulfilled contract

Previously, several factors were discussed to determine whether selling one product twice constitutes fraud, but the behavior of the perpetrator afterwards is the most important factor, directly determining whether it is a civil dispute or a criminal offense.

The subsequent actions of the perpetrator are crucial in determining whether they have the intention of illegal possession after the fact of selling one product twice. Based on the pursuit of maximizing interests in human nature, sometimes selling one product at a time is inevitable. As long as the perpetrator can handle the relationships between all parties and make up for the losses caused, it still indicates that they have no intention of illegal possession.

If the perpetrator promptly and actively contacts the other party who cannot fulfill the contract, discusses solutions, has the sincerity and behavior of compensation, and the compensation can basically compensate for the losses of the other party, then their behavior does not constitute fraud. For example, after selling one house and two properties, the perpetrator should promptly repay the payment to one party and provide interest or liquidated damages, and obtain the consent and understanding of the other party.

But if the perpetrator, after receiving two payments for one product and two sales, refuses to negotiate a solution with the buyer, transfers the payment or squanders it recklessly, making it impossible to return the payment, then the intention of fraud is obvious. Or even if they promise to solve it verbally but repeatedly delay or even go missing, the intention of fraud is also obvious.

So, after the perpetrator sells one product and receives payment, as long as they actively and promptly resolve the dispute and compensate for the buyer's economic losses, their illegal possession purpose can be eliminated. On the contrary, it can be basically judged that it constitutes the crime of fraud.