fin 240 kaplowitz worksheet 15.2: fraudulent misrepresentation
Select the three situations where scienter may be found.
(1) knowingly making a misstatement of fact (2) making a statement recklessly without verifying its truth (3) implying a statement is based on personal knowledge when it is not
Select the three elements typically found in fraud.
(1) misrepresentation of material fact (2) intent to deceive (3) justifiable reliance on the misrepresentation
Fraudulent misrepresentation refers to misrepresentation which is _____ false and is _____ to mislead another. The person making the statements knows or _____ they are false.
consciously, intended, believes
Scienter is the science of determining if fraud exists.
false
When a party has been the victim of fraudulent misrepresentation, he may collect damages even if he has suffered no harm.
false
Innocent misrepresentation
giving wrong information about a material fact but with a reasonable belief that it is correct information
Fraudulent misrepresentation
giving wrong information about a material fact intentionally
Negligent misrepresentation
giving wrong information about a material fact with an unreasonable belief that it is correct information
Silence normally _____ misrepresentation. However, if there is _____ defect or a(n) _____ relationship, then a seller _____ have a duty to speak.
is not, a latent, fiduciary, may
An element of fraud is that the deceived party must have had a _____ reason for relying on the misrepresentation.
justifiable
Hiding a material fact from the other party to a contract is considered:
misrepresentation by action
There is one instance when an opinion may create fraudulent misrepresentation. Select the two criteria for this situation.
naïve purchaser, opinion of an expert
Statements of _____ or _____ about the future are generally not subject to fraud claims. Normally, this type of talk is called _____ and _____ legal.
opinion, productions, puffery, is
When a naïve purchaser relies on the opinion of an expert, the innocent party may be entitled to _____ (cancelation of the contract) or _____ (a change to the contract).
recission, reformation
When a party is fraudulently induced into a contract, that party can _____.
rescind the contract
Even though fraud is a tort, it is also a contract principle related to voluntary consent.
true
If there is an innocent misrepresentation, the innocent party may rescind the contract, but not sue for damages.
true
Negligent misrepresentation occurs when a party gives incorrect information about a material fact, believing it is true because of a lack of care in investigating the information.
true
People are assumed to know the law; therefore, if a nonexpert lies to someone about the law, it is not misrepresentation.
true
Misrepresentation can occur by:
words or actions