Question

Loretta is cleaning out her attic and finds a painting of a garden of blue irises she bought at a garage sale. Loretta asks her friend, Mina, who's an art expert, if the painting is worth anything. Mina recognizes the painting as a Van Gogh original and knows it's worth millions, but tells Loretta the painting isn't worth very much. The painting wouldn't match her own décor, so Loretta offers to sell it to Mina for $50. Mina accepts the offer and pays Loretta $50. Mina later is able to sell the Van Gogh original for $2 million.
Loretta's decision to sell the painting for $50 can best be described by which of the following?
A. Scienter
B. Reliance on a misrepresentation
C. Fraud in the inception
D. Misrepresentation of material fact

Answer 1

Answer:

The answer is D. Misrepresentation of a material fact.

Explanation:

This element of fraud refers to omitting information in a contract or transcation. The statements might be intentional (negligent misrepresentation) or accidental (innocent misrepresentaton).

In order to claim someone has commited this type of fraud, clear proof must be presented.