R4 M4 - Legal Duties & Responsibilities

Question 1

The elements of constructive fraud:

Answer 1

1.Misrepresentation of a material fact.
2.Defendant acts with gross negligence or recklessly.
3.Intent to induce plaintiff’s reliance.
4.Actual and justifiable reliance by plaintiff.
5.Damages.

Actual fraud requires intent to deceive.

Question 2

Which of the following statements is(are) correct regarding the common law elements that must be proven to support a finding of constructive fraud against a CPA?

I.The plaintiff has justifiably relied on the CPA’s misrepresentation.

II.The CPA has acted in a grossly negligent manner.

A.	I only.

B.	Both I and II.

C.	Neither I nor II.

D.	II only.

Answer 2

Choice “B” is correct.

The elements of constructive fraud:

Misrepresentation of a material fact.
Defendant acts with gross negligence or recklessly.
Intent to induce plaintiff’s reliance.
Actual and justifiable reliance by plaintiff.
Damages.

Actual fraud requires intent to deceive.