MB0051 - Legal Aspects of Business - Set 1
Question 1: Distinguish between fraud and misrepresentation.
Distinction between fraud and misrepresentation:
Sometimes the terms fraud and misrepresentation are used inter-changeably by readers however they are actually different. There is not a much difference between the two but a little one as misrepresentation does not directly mean fraud. Below is a table on the salient points to distinguish the terms:
|Fraud |Misrepresentation | |The word fraud comes from the Middle English word “fraude” taken |Misrepresentation is a type of lying or falsehood in which a person| |from the Old French and derived from the Latin “fraus”. The word |says or does something that would lead another person to believe | |fraud means a deliberate form of deception that is practiced to |something that is not “in accordance with the facts”. | |secure some sort of unlawful and unfair gain. | | |Implies on intention to deceive, hence it is intentional or willful|It is an innocent wrong without any intention to deceive. The | |wrong. |person making the statement believes it to be true. | |A civil wrong which entitles a party to claim damages in addition |It gives only the right to rescind the contract and there can be no| |to the right to rescind the contract. |suit for damages. | |In fraud, the person making the representation does not himself |In situations of innocent misrepresentation the person making the | |believe in the truth of the statement he is making. n cases of |statement may believe that what he is saying is true. This is due | |fraud, the person making the statement is a complete liar and is |to the fact that the person making the statement is simply | |making the statement to deceive others to enter into a contract |repeating what another person has asserted to be true | |Deceit, trickery, sharp practice, or breach of confidence, |A misrepresentation or concealment with reference to some fact | |perpetrated for profit or to gain some unfair or dishonest |material to a transaction that is made with knowledge of its | |advantage. |falsity or in reckless disregard of its truth or falsity and with | | |the intent to deceive another and that is reasonably relied on by | | |the other who is injured thereby. | |Fraud always has malicious intent. |Misrepresentation may not have malicious intent to deceive if it | | |happens negligently through a misstatement and/or omission of a | | |material fact(s). | |Types of fraud are: |Types of misrepresentation are: | |Fraud is fraud until you get into a legal issue. Then there are |Fraudulent misrepresentation | |differences but there is only one type of fraud in realty. |Negligent misrepresentation | | |Innocent misrepresentation |
Question 2: What are the remedies for breach of contract?...
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