Multiple choice

Which of the following statements is correct?

  1. In the case of fraud, the person making representation believes it to be true.

  2. In the case of misrepresentation, the maker does not believe it to be true.

  3. Fraud does not afford a ground for bringing an action in tort for damages, whereas misrepresentation does.

  4. In the case of misrepresentation, the fact that plaintiff had means of discovering the truth by exercising ordinary diligence can be good defence against the repudiation of the contract but such a defence cannot be set up in the case of fraud other than fraudulent silence.
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D Correct answer
Explanation

Fraud involves intentional deception - the person making the statement knows it is false. Misrepresentation occurs when someone makes a false statement believing it to be true (innocent misrepresentation) or without reasonable grounds for believing its truth (negligent misrepresentation). A key legal distinction is that for misrepresentation, the defendant can argue that the plaintiff had the means to discover the truth through ordinary diligence, but this defense is not available for fraud cases except fraudulent silence.

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