Electropic LLC Report

Transcript

Fraud Video Transcript

Okay. So what is the intentional tort a fraud? Well, that's the intentional activity of misrepresenting a material fact to someone. And the person to whom you represent misrepresent that fact materially relies on that fact to his or her detriment.

Okay. So you use that misrepresentation to induce someone perhaps to enter into a contract or to undertake some form of activity, such as investing money with you. So I misrepresent facts and you invest that money and then I later steal that money. So that would be fraudulent, or I give you information about the situation that's totally not true.

You rely on that information, that material information, and it causes you to invest money. You lose your money and then, of course, I defrauded you out of your money. Okay. In many cases, it can be simply to fail to disclose a material fact that's known to you. So perhaps I go to the bank and I ask for a bank loan. And I disclose everything about my business except some key material facts that would probably cause the bank to not want to loan me the money.

Now if they do loan me the money and then those material facts come to light, I have defrauded the bank or I've committed fraud on the bank in order to get that money. So that could be actionable by me. So in any of those situations, there is a representation or misrepresentation that is material. You rely on it and induces action that you wouldn't have taken but for that misrepresentation. Okay.

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Transcript

Fraud Video Transcript

Okay. So what is the intentional tort a fraud? Well, that's the intentional activity of misrepresenting a material fact to someone. And the person to whom you represent misrepresent that fact materially relies on that fact to his or her detriment.

Okay. So you use that misrepresentation to induce someone perhaps to enter into a contract or to undertake some form of activity, such as investing money with you. So I misrepresent facts and you invest that money and then I later steal that money. So that would be fraudulent, or I give you information about the situation that's totally not true.

You rely on that information, that material information, and it causes you to invest money. You lose your money and then, of course, I defrauded you out of your money. Okay. In many cases, it can be simply to fail to disclose a material fact that's known to you. So perhaps I go to the bank and I ask for a bank loan. And I disclose everything about my business except some key material facts that would probably cause the bank to not want to loan me the money.

Now if they do loan me the money and then those material facts come to light, I have defrauded the bank or I've committed fraud on the bank in order to get that money. So that could be actionable by me. So in any of those situations, there is a representation or misrepresentation that is material. You rely on it and induces action that you wouldn't have taken but for that misrepresentation. Okay.

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Ask Yourself

· How do feel about the requirement that fraud be intentional? Should a misrepresentation that is reckless and unverified be considered fraudulent, even if it is not intentional? Why or why not?

· Daryl is selling a poster bearing the signature of a known celebrity athlete. Daryl advertises that the poster is 15 years old and was signed when the athlete was a rookie. In reality, the poster was signed recently, following the athlete’s retirement. If someone buys the poster based upon Daryl’s representations, is there a tortious act? Why or why not?

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