Author Question: Distiguish among fraud, duress and undue influence. Give examples of ... (Read 47 times)

chandani · **on:** Jun 24, 2018

Distiguish among fraud, duress and undue influence. Give examples of each.

Question 2

A Subchapter S or S Corporation is:
A) a special class of close corporation under the MBCA.
B) an IRS tax treatment option for corporations owned by a limited number of shareholders.
C) a not-for-profit corporation.
D) None of the above

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

Answer to Question 1

Fraud is intentional misrepresentation. Fraud is present when one party deceives the other party into an agreement based on untrue or incomplete information. In fraud, the wronged party has a choice, but not the information needed to make the best choice. Example: Seller of a house does not disclose that he has seen termite damage in a remote corner of the foundation of the house.
Duress is physical or mental force exerted by one party that causes the other party to feel as if they have no choice but to agree to the first party's demands. In duress, the wronged party essentially has no choice. Example: An employee who has discovered irregularities in his company's accounting documents has a confidential discussion with his boss and ends up negotiating a hefty raise for himself.

Undue influence is when one party has more control over another party's decisions than they should, based on an unequal relationship. In undue influence, the wronged party has a choice, but doesn't realize he is not making the reasonable choice. Example: A neighbor to an elderly man befriends him, bringing him food and small gifts for several months, then happens to mention how much she loves his 1965 totally restored Mustang in his garage. When the elderly man offers to sell it to her for 100, his son protests.

Answer to Question 2

B