Author Question: Discuss the meaning of material fact in fraud situations.[br][br][b][color=#151B54]Question ... (Read 86 times)

mckennatimberlake · **on:** Jun 24, 2018

Discuss the meaning of material fact in fraud situations.

Question 2

If Jane persuades Linda to buy her horse by telling Linda that the horse runs like the wind, then Jane's statement is
A) fraud.
B) reckless misrepresentation.
C) a unilateral mistake.
D) puffery.

itsakadoozi · **Reply #1 on:** Jun 24, 2018

Answer to Question 1

Fraud begins when a party to a contract represents something that is factually wrong. The statement must first be a fact, not an opinion. This car is the best would not be the type of statement that should be relied upon. Contrast that type of statement with, this car gets 28 miles per gallon. This is a statement of fact upon which someone would rely. The statement must also be material; that is, important in the decision to enter into the contract. For the fact to be material, the maker must have expected the other party to rely on the statement, and the other party must have relied upon it.

Answer to Question 2

D