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mmjp
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Joined: 07 Nov 2009
Location: Japan
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| Posted: 07 Jan 2010 at 01:52 | IP Logged
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I would like someone to help me with the following MCQ.
Bisk 39th edition Accountant's legal responsibilities No.8
Which of the following facts must be proven for a plaintiff to prevail in a common law negligent misrepresentation action?
a)The defendant made the misrepresentations with a reckless disregard for the truth.
b) The plaintiff justifiably relied on the misrepresentations.
c)The misrepresentations were in writing.
d) The misrepresentations concerned opinion.
answer
The answer is b
"Negligent misrepresentation requires proof of a misstatement of material fact upon which the other party relies to their detriment.
It is not necessary to show that the misrepresentations were made with a reckless disregard for the truth nor that they be in writing."
I understand the plaintiff need not prove the reliance in the case of negligence.
Or is negligent misrepresentation a fraud?
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cpa0123
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| Posted: 07 Jan 2010 at 10:26 | IP Logged
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http://www.cpanet.com/cpa_forum/forum_posts.asp?TID=29232&am p;KW=constructive+fraud
http://www.cpanet.com/cpa_forum/forum_posts.asp?TID=24693&am p;KW=constructive+fraud
Maybe this answers your question
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mmjp
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| Posted: 07 Jan 2010 at 20:42 | IP Logged
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cpa0123,
Thank you for your post, and I understand it.
Negligent misrepresentation is a fraud, and is a constructive fraud(gross negligence) which has no scienter.
Past posts you gave me helped me a lot, thanks!
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Topic: negligent misrepresentation
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