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Essay

Fraud vs. Misrepresentation

Nowadays, the economic relations are widespread almost everywhere. To prevent the wrongs in the sphere of economic relations, to defend the rights of people and firms in the named sphere there exists the law of torts. Tort law determines when and why a person must pay compensation for the injuries he or she inflicts on others. As a matter of fact, a tort is a civil wrong other than breach of contract, for which the court will provide a remedy in the form of an action for damages. The two kinds of torts are fraud and misrepresentation. And in this essay I would like to specify features of each, give their classification and draw a distinction between them.

First of all, I suppose the most significant thing is to give the definitions of terms “fraud” and “misrepresentation”. On the whole, the lawyers in the countries of a common law system define fraud as an intentional deception or a dishonest scheme used to take deliberate and unfair advantage of another person. On the other hand, the misrepresentation is defined by them as an innocent, unintentional misstament or nondisclosure of facts. I am convinced that for the better understanding it will be useful to make examples of these torts. So, the example of a fraud is the forgery of cheques or documents and, in misrepresentation’s turn, it is selling an item while forgetting to mention some defect of it that is not seen by the naked eye.

Apart from things mentioned above, I feel very strongly that it will be good for understanding to know their classification. I should mark that, as a rule, misrepresentation (so called innocent misrepresentation) is defined as “innocent misstament or nondisclosure of facts” and fraud (so called actual fraud) – as “an intentional deception…”. It seems quite easy but there is confusion. Common law distinguishes between innocent misrepresentation and intentional misrepresentation, but it turns out that the term for intentional misrepresentation is fraud. Moreover, the lawyers also distinguish constructive frauds – it is also surprising, but under this term they mean innocent misrepresentation. Such outcome was made by me after reading text about fraud in course of legal English.

As there are only two torts in fact, I would like to draw a distinguish between them. The main difference between them is intention. Fraud is done with the intention of wrongful personal gains or to cause damage to another person. Misrepresentation, on the other hand, is merely not presenting entire information; sometimes misrepresentation takes place as the person may not have knowledge of entire facts. In principle, I gave all the necessary information for the understanding, so we can come to the end of the essay.

To sum up all the mentioned above, it must be said that both fraud and misrepresentation are torts. Another important thing to remember is that Anglo-Saxon law distinguishes between innocent misrepresentation and intentional misrepresentation, and the term for intentional misrepresentation is fraud. Moreover, the lawyers also distinguish constructive frauds – by this term they mean innocent misrepresentation. The defining criterion for the difference between fraud and misrepresentation is the intent: malicious intent is typical for the tort of fraud and lack of the entire information or the knowledge of entire facts is typical for the misrepresentation.