Legal Elements of Fraud Flashcards

Under common law, which element of fraud requires that the victim actually relied on the false representation?

Answer: Justifiable reliance

Justifiable reliance means the victim must have reasonably relied on the misrepresentation when making their decision.

The term 'scienter' in fraud law refers to:

Answer: Knowledge of falsity or reckless disregard for the truth

Scienter is the mental state element requiring the perpetrator to have known the statement was false or acted with reckless disregard for its truth.

A material misrepresentation in fraud is best defined as one that:

Answer: Would influence a reasonable person's decision

Materiality means the false statement was significant enough that a reasonable person would consider it important when making a decision.

Which of the following is NOT a required element of civil fraud under most U.S. jurisdictions?

Answer: A written contract

Civil fraud does not require a written contract; it can occur through oral or implied misrepresentations.

In the context of fraud, 'concealment' as a form of misrepresentation requires:

Answer: A duty to disclose that was breached

Concealment constitutes fraud when a party with a legal duty to disclose material information intentionally withholds it.

Which doctrine holds that a corporation can be held liable for fraud committed by its employees acting within the scope of their employment?

Answer: Respondeat superior

Respondeat superior ('let the master answer') makes employers vicariously liable for torts, including fraud, committed by employees in the course of their duties.

The statute of limitations for fraud typically begins to run from the date:

Answer: The victim discovered or should have discovered the fraud

Most jurisdictions apply the 'discovery rule,' starting the limitations period when the victim discovered or reasonably should have discovered the fraud.