Lauren wants to open a floral shop in a downtown business district.She doesn't have funds enough to purchase inventory and pay six months' rent up front.Lauren approaches a good friend,Jamie,to discuss the possibility of Jamie investing funds and becoming a 25% partner in the business.After a lengthy discussion,Jamie agrees to invest.Eight months later,Jamie discovered that Lauren has not be honest with her regarding some aspects of the business financial operation.In order for Jamie to sue Lauren for fraud,all the following must be true except
A)Jamie's decision to invest was primarily based on Lauren's assertion that she had prior floral retail experience.
B)Jamie has suffered a substantial loss in her investment because of Lauren's deception.
C)Jamie trusted and relied on Lauren's representation of the business financial operation.
D)Jamie found Lauren dishonest because she does not always reconcile the business cash account on a timely basis.

Question

Quizplus · Accepted Answer

The fact that Lauren does not always reconcile the business cash account on a timely basis does not necessarily constitute fraud. The other options, A, B, and C, are all elements that are typically required in a fraud case: a misrepresentation or omission by Lauren, reliance on the misrepresentation by Jamie, and resulting harm to Jamie's investment.

Lauren Wants to Open a Floral Shop in a Downtown