[nalratoss]

Fraud
Negligent misrepresentation
Innocent misrepresentation
Mistake?

I always thought that negligent misrepresentation, innocent misrepresentation and mistake are close. I can tell the difference between them and fraud. How do further differentiate?

Thanks. This question relates to contract law.

[YouCanDoIt]

Fraud has 5 elements:
1. misrepresentation of material fact/ knowledge of irregularities
2. INTENT TO DECEIVE (Knowing the statement was false) = SCIENTER
3. Actual & justifiable reliance on misrepresentation by plaintiff
4. Intent to induce that reliance
5. Damage

GROSS NEGLIGENCE & CONSTRUCTIVE FRAUD has 5 elements:
1. Misrepresentation of material fact/ knowledge of irregularities
2. DEFENDANT ACTS **RECKLESSLY** (Keyword , and differentiates from *fraud* above)
3. Actual and justifiable reliance on misrepresentation by plaintiff
4. Intent to induce that reliance
5. Damages

NEGLIGENCE ALONE
1. Breach of duty of care
2. Casualty or injury
3. plaintiff : NO NEED TO SHOW *RELIANCE*

So, usually CPA exam questions tend to also focus on types of DEFENSE that can be used by a CPA, etc. to defend themselves against the : Fraud, Negligence, Gross Negligence

Also, the other main point, Who is a CPA, etc. liable to when they are accused of the above .
Example: Negligence –> CPA liable to client, any person or foreseeable class of persons whom the cpa or the firm KNOWS will be RELYING on he cpa's work.

Gross Negligence –> CPA liable to client, any person or foreseeable class of persons whom the cpa or the firm knows will be relying on the cpa's work +++ any other plaintiff that was effected.

FAR: 76
REG: Currently studying
AUD:
BEC:

[YouCanDoIt]

For mistakes
Far as I know, the MUTUAL MISTAKE (Material fact, both parties mistaken), makes a contract unenforceable.

I didn't come across many mistake questions during practice.

FAR: 76
REG: Currently studying
AUD:
BEC:

[Author]

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