Asked by itzel torres on May 17, 2024
Verified
Digital Systems Corporation files a suit against Ethan, its former accountant, alleging constructive fraud. Digital Systems need not prove
A) misstatement of a material fact.
B) intent to deceive.
C) justifiable reliance.
D) an injury.
Constructive Fraud
Deception that occurs when a person or entity gains an unfair advantage over another through dishonest or unfair practices, without the need for traditional deceit.
Intent to Deceive
The deliberate intention to mislead or trick someone, often to gain an unfair advantage or benefit.
Material Fact
A fact that is significant or essential to the issue or matter at hand, and could influence a decision.
- Differentiate among negligence, malpractice, and fraud within the scope of professional services.
Verified Answer
OS
Onita SkinnerMay 22, 2024
Final Answer :
B
Explanation :
In a case of constructive fraud, the plaintiff (Digital Systems Corporation, in this case) does not need to prove that the defendant (Ethan) had an intent to deceive. Constructive fraud can be found based on a breach of duty or an act that deceives another to their detriment, without the necessity of proving malicious intent.
Learning Objectives
- Differentiate among negligence, malpractice, and fraud within the scope of professional services.