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Direction: Given below is a statement of legal principle followed by a factual situation. Apply the principle to the facts given below and select the most appropriate answer.
Legal Principles:
1. A deceit occurs when a misrepresentation is made with the express intention of defrauding a party, subsequently causing loss to that party.
2. “Misrepresentation” means and includes - the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true; any breach of duty which, without an intent to deceive, gains an advantage of the person committing it, or any one claiming under him, by misleading another to his prejudice, or to the prejudice of any one claiming under him; causing, however innocently, a party to an agreement, to make a mistake as to the substance of the thing which is the subject of the agreement.
Fact: XY Company in its prospectus stated that the company was permitted to make engines that were powered by electricity, rather than by fuel. In reality, the company did not possess such a right as this had to be approved by the Government Board. Gaining the approval for such a claim from the Board was considered a formality in such circumstances and the claim was put forward in the prospectus with this information in mind. However, the claim of the company for this right was later refused by the Board. The individuals who had purchased a stake in the business, upon reliance on the statement, brought a claim for deceit against the defendant’s business.
Decide.
  • a)
    The company is liable for false representation as their claims were eventually turned out to be false.
  • b)
    The company is liable as their false statements has resulted in causing loss to the shareholders.
  • c)
    The company is not liable as the statement in its prospectus was simply incorrect and not fraudulent.
  • d)
    The shareholders should have collected as much information regarding the company as possible before purchasing a stake in it.
Correct answer is option 'C'. Can you explain this answer?
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Direction: Given below is a statement of legal principle followed by ...
Option (C) The company is not liable because (1) there is no express intention to defraud a party resulting in the loss.
(2) The company is not misleading another to his prejudice, or to the prejudice of anyone claiming under him. So the statement made by the company is incorrect, not fraudulent. The company had the capacity to make electric power engines and approval was just a formality that the company may have anticipated will be granted. The company was neither fraudulent nor misleading but simply not correct in its statement.
Hence, the correct option is (C).
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Direction: Given below is a statement of legal principle followed by ...
Understanding the Legal Principle
- A deceit involves a misrepresentation made with the intention to defraud, leading to a loss for the deceived party.
- Misrepresentation includes false assertions made without adequate information, breaches of duty, and unintentional misleading that causes a party to make a mistake regarding the agreement's substance.
Application of Facts
- XY Company claimed in its prospectus that it was permitted to manufacture electric-powered engines.
- However, the company did not have the necessary government approval; it viewed the approval as a mere formality.
- The approval was ultimately denied, leading to losses for shareholders who relied on this statement.
Analysis of Options
- Option A: The company is liable for false representation as their claims were eventually turned out to be false.
- This option overlooks the essential element of intention to defraud, which is necessary for deceit.
- Option B: The company is liable as their false statements have resulted in causing loss to the shareholders.
- Although losses occurred, the lack of fraudulent intent in the company's belief diminishes liability.
- Option C: The company is not liable as the statement in its prospectus was simply incorrect and not fraudulent.
- This is the correct answer. The company believed its misrepresentation was true and did not intend to deceive shareholders.
- Option D: The shareholders should have collected as much information regarding the company as possible before purchasing a stake in it.
- While due diligence is important, it does not negate the company's responsibility if deceit is established.
Conclusion
The correct answer is Option C because the company's misrepresentation, albeit incorrect, lacked the intention to deceive. Thus, it does not fulfill the legal criteria for deceit as outlined in the principles.
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Direction: Given below is a statement of legal principle followed by a factual situation. Apply the principle to the facts given below and select the most appropriate answer.Legal Principles: A deceit occurs when a misrepresentation is made with the express intention of defrauding a party, subsequently causing loss to that party. “Misrepresentation” means and includes— the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true; any breach of duty which, without an intent to deceive, gains an advantage of the person committing it, or any one claiming under him, by misleading another to his prejudice, or to the prejudice of any one claiming under him; causing, however innocently, a party to an agreement, to make a mistake as to the substance of the thing which is the subject of the agreement. Fact: XY Company in its prospectus stated that the company was permitted to make engines that were powered by electricity, rather than by fuel. In reality, the company did not possess such a right as this had to be approved by the Government Board. Gaining the approval for such a claim from the Board was considered a formality in such circumstances and the claim was put forward in the prospectus with this information in mind. However, the claim of the company for this right was later refused by the Board. The individuals who had purchased a stake in the business, upon reliance on the statement, brought a claim for deceit against the defendant’s business. Decide.

It is essential to the creation of a contract that both parties should agree to the same thing in the same sense. Mutual consent, which should also be a free consent, is the sine qua non of a valid agreement and one of its essential elements is that a thing is understood in the same sense by a party as is understood by the other. Not only consent, but free consent is provided in Section 10 of the Indian Contract Act, 1872 to be necessary to the complete validity of a contract. Consent is free when it works without obstacles to impede its exercise. Where there is no consent or no real and certain object of consent, there can be no contract at all. Where there is consent, but not free consent, there is generally a contract voidable at the option of the party whose consent was not free. A general averment that consent was not freely obtained is not enough, and it is necessary to set up one of the vitiating elements such as fraud which includes, false assertion, active concealment, promise without intention of performing it, any other deceptive act, or any act declared as fraudulent. In order to constitute fraud, the act should have been done by the party to the contract, or by any other person with his connivance, or by his agent and with intent to deceive the other party thereto or his agent, or to induce him to enter into the contract. There is no duty upon parties to speak about facts likely to affect the other party’s consent to the contract and mere silence does not amount to fraud, unless the circumstances of the case show that there is duty to speak, or silence is, in itself equivalent to speech. On the other hand, misrepresentation falls into three categories: (i) a statement of fact, which if false, would be misrepresentation if the maker believes it to be true, but which is not justified by the information he possesses; (ii) any breach of duty which gains an advantage to the person committing it by misleading another to his prejudice, there being no intention to deceive; and (iii) causing a party to an agreement to make a mistake as to the substance of the thing which is the subject of the agreement, even though done innocently.Q.In which of the following statements will a contract not be voidable at the option of a party?

It is essential to the creation of a contract that both parties should agree to the same thing in the same sense. Mutual consent, which should also be a free consent, is the sine qua non of a valid agreement and one of its essential elements is that a thing is understood in the same sense by a party as is understood by the other. Not only consent, but free consent is provided in Section 10 of the Indian Contract Act, 1872 to be necessary to the complete validity of a contract. Consent is free when it works without obstacles to impede its exercise. Where there is no consent or no real and certain object of consent, there can be no contract at all. Where there is consent, but not free consent, there is generally a contract voidable at the option of the party whose consent was not free. A general averment that consent was not freely obtained is not enough, and it is necessary to set up one of the vitiating elements such as fraud which includes, false assertion, active concealment, promise without intention of performing it, any other deceptive act, or any act declared as fraudulent. In order to constitute fraud, the act should have been done by the party to the contract, or by any other person with his connivance, or by his agent and with intent to deceive the other party thereto or his agent, or to induce him to enter into the contract. There is no duty upon parties to speak about facts likely to affect the other party’s consent to the contract and mere silence does not amount to fraud, unless the circumstances of the case show that there is duty to speak, or silence is, in itself equivalent to speech. On the other hand, misrepresentation falls into three categories: (i) a statement of fact, which if false, would be misrepresentation if the maker believes it to be true, but which is not justified by the information he possesses; (ii) any breach of duty which gains an advantage to the person committing it by misleading another to his prejudice, there being no intention to deceive; and (iii) causing a party to an agreement to make a mistake as to the substance of the thing which is the subject of the agreement, even though done innocently.Q.Mr. A sells a car to Mr. Y, his childhood friend with a knowledge that the car is defective. Bef ore buying the car, Mr. Y says to Mr. A , “If you do not deny it, I shall assume that the car is perfect”. Mr. A says nothing. In light of the statement, decide the liability of Mr. A.

Directions: Study the following information carefully and answer the questions given beside.Legal Aid Provides free legal services to the poor and needy peoples who cannot afford the services of a lawyer for the conduct of a case or a legal proceeding in any court, tribunal or before an authority. Legal Aid is the method adopted to ensure that no one is deprived of professional advice and help because of lack of funds. Therefore, the main object is to provide equal justice is to be made available to the poor and weaker section of society.Persons those are entitled to Free Legal Services under the Legal Services Authorities Act are: a member of a Scheduled Caste or Scheduled Tribe; a victim of trafficking in human beings or begar as referred to in Article 23 of the Constitution; a woman or a child; a mentally ill or otherwise disabled person; a person under circumstances of undeserved want such as being a victim of a mass disaster, ethnic violence, caste atrocity, flood, drought, earthquake or industrial disaster; or an industrial workman; or in custody, including custody in a protective home or in a juvenile home of in a psychiatric hospital or psychiatric nursing home within the meaning of clause (g) of section 2 of the Mental Health Act, 1987; or a person whose annual income less than rupees fifty thousand or such other higher amount as may be prescribed by the State Government.There are certain objectives of the government to establish a system of the free legal system. And the Right to Free Legal Aid is also mentioned under Article 39A of the Constitution of India.Objectives:Right to Legal Aid in IndiaFree legal aid is necessary for those people as it is written in our Indian constitution under Article 14 that all the people are equal to the justice should also be provided to all persons whether they are rich or poor. Free legal aid is given to the poor who are not able to fight a case against a powerful or a rich person can also get justiceLegal RepresentationLegal representation means that the poor and the weaker section get legal representative as they are also the citizen of India and it is our fundamental right to equality under Article 14 of the Constitution of India. So whether a person is rich or a poor he has the right to have a legal representative so that they can also get free legal aid from the government. It is written under Article 39A of the Constitution of India to give Free legal aid to all the citizen of India.Q. What does "Legal Representation" refer to in the context of the passage?

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Direction: Given below is a statement of legal principle followed by a factual situation. Apply the principle to the facts given below and select the most appropriate answer.Legal Principles: 1. A deceit occurs when a misrepresentation is made with the express intention of defrauding a party, subsequently causing loss to that party.2. “Misrepresentation” means and includes - the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true; any breach of duty which, without an intent to deceive, gains an advantage of the person committing it, or any one claiming under him, by misleading another to his prejudice, or to the prejudice of any one claiming under him; causing, however innocently, a party to an agreement, to make a mistake as to the substance of the thing which is the subject of the agreement.Fact: XY Company in its prospectus stated that the company was permitted to make engines that were powered by electricity, rather than by fuel. In reality, the company did not possess such a right as this had to be approved by the Government Board. Gaining the approval for such a claim from the Board was considered a formality in such circumstances and the claim was put forward in the prospectus with this information in mind. However, the claim of the company for this right was later refused by the Board. The individuals who had purchased a stake in the business, upon reliance on the statement, brought a claim for deceit against the defendant’s business.Decide. a)The company is liable for false representation as their claims were eventually turned out to be false.b)The company is liable as their false statements has resulted in causing loss to the shareholders.c)The company is not liable as the statement in its prospectus was simply incorrect and not fraudulent.d)The shareholders should have collected as much information regarding the company as possible before purchasing a stake in it.Correct answer is option 'C'. Can you explain this answer?
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Direction: Given below is a statement of legal principle followed by a factual situation. Apply the principle to the facts given below and select the most appropriate answer.Legal Principles: 1. A deceit occurs when a misrepresentation is made with the express intention of defrauding a party, subsequently causing loss to that party.2. “Misrepresentation” means and includes - the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true; any breach of duty which, without an intent to deceive, gains an advantage of the person committing it, or any one claiming under him, by misleading another to his prejudice, or to the prejudice of any one claiming under him; causing, however innocently, a party to an agreement, to make a mistake as to the substance of the thing which is the subject of the agreement.Fact: XY Company in its prospectus stated that the company was permitted to make engines that were powered by electricity, rather than by fuel. In reality, the company did not possess such a right as this had to be approved by the Government Board. Gaining the approval for such a claim from the Board was considered a formality in such circumstances and the claim was put forward in the prospectus with this information in mind. However, the claim of the company for this right was later refused by the Board. The individuals who had purchased a stake in the business, upon reliance on the statement, brought a claim for deceit against the defendant’s business.Decide. a)The company is liable for false representation as their claims were eventually turned out to be false.b)The company is liable as their false statements has resulted in causing loss to the shareholders.c)The company is not liable as the statement in its prospectus was simply incorrect and not fraudulent.d)The shareholders should have collected as much information regarding the company as possible before purchasing a stake in it.Correct answer is option 'C'. Can you explain this answer? for CLAT 2024 is part of CLAT preparation. The Question and answers have been prepared according to the CLAT exam syllabus. Information about Direction: Given below is a statement of legal principle followed by a factual situation. Apply the principle to the facts given below and select the most appropriate answer.Legal Principles: 1. A deceit occurs when a misrepresentation is made with the express intention of defrauding a party, subsequently causing loss to that party.2. “Misrepresentation” means and includes - the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true; any breach of duty which, without an intent to deceive, gains an advantage of the person committing it, or any one claiming under him, by misleading another to his prejudice, or to the prejudice of any one claiming under him; causing, however innocently, a party to an agreement, to make a mistake as to the substance of the thing which is the subject of the agreement.Fact: XY Company in its prospectus stated that the company was permitted to make engines that were powered by electricity, rather than by fuel. In reality, the company did not possess such a right as this had to be approved by the Government Board. Gaining the approval for such a claim from the Board was considered a formality in such circumstances and the claim was put forward in the prospectus with this information in mind. However, the claim of the company for this right was later refused by the Board. The individuals who had purchased a stake in the business, upon reliance on the statement, brought a claim for deceit against the defendant’s business.Decide. a)The company is liable for false representation as their claims were eventually turned out to be false.b)The company is liable as their false statements has resulted in causing loss to the shareholders.c)The company is not liable as the statement in its prospectus was simply incorrect and not fraudulent.d)The shareholders should have collected as much information regarding the company as possible before purchasing a stake in it.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CLAT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Direction: Given below is a statement of legal principle followed by a factual situation. Apply the principle to the facts given below and select the most appropriate answer.Legal Principles: 1. A deceit occurs when a misrepresentation is made with the express intention of defrauding a party, subsequently causing loss to that party.2. “Misrepresentation” means and includes - the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true; any breach of duty which, without an intent to deceive, gains an advantage of the person committing it, or any one claiming under him, by misleading another to his prejudice, or to the prejudice of any one claiming under him; causing, however innocently, a party to an agreement, to make a mistake as to the substance of the thing which is the subject of the agreement.Fact: XY Company in its prospectus stated that the company was permitted to make engines that were powered by electricity, rather than by fuel. In reality, the company did not possess such a right as this had to be approved by the Government Board. Gaining the approval for such a claim from the Board was considered a formality in such circumstances and the claim was put forward in the prospectus with this information in mind. However, the claim of the company for this right was later refused by the Board. The individuals who had purchased a stake in the business, upon reliance on the statement, brought a claim for deceit against the defendant’s business.Decide. a)The company is liable for false representation as their claims were eventually turned out to be false.b)The company is liable as their false statements has resulted in causing loss to the shareholders.c)The company is not liable as the statement in its prospectus was simply incorrect and not fraudulent.d)The shareholders should have collected as much information regarding the company as possible before purchasing a stake in it.Correct answer is option 'C'. Can you explain this answer?.
Solutions for Direction: Given below is a statement of legal principle followed by a factual situation. Apply the principle to the facts given below and select the most appropriate answer.Legal Principles: 1. A deceit occurs when a misrepresentation is made with the express intention of defrauding a party, subsequently causing loss to that party.2. “Misrepresentation” means and includes - the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true; any breach of duty which, without an intent to deceive, gains an advantage of the person committing it, or any one claiming under him, by misleading another to his prejudice, or to the prejudice of any one claiming under him; causing, however innocently, a party to an agreement, to make a mistake as to the substance of the thing which is the subject of the agreement.Fact: XY Company in its prospectus stated that the company was permitted to make engines that were powered by electricity, rather than by fuel. In reality, the company did not possess such a right as this had to be approved by the Government Board. Gaining the approval for such a claim from the Board was considered a formality in such circumstances and the claim was put forward in the prospectus with this information in mind. However, the claim of the company for this right was later refused by the Board. The individuals who had purchased a stake in the business, upon reliance on the statement, brought a claim for deceit against the defendant’s business.Decide. a)The company is liable for false representation as their claims were eventually turned out to be false.b)The company is liable as their false statements has resulted in causing loss to the shareholders.c)The company is not liable as the statement in its prospectus was simply incorrect and not fraudulent.d)The shareholders should have collected as much information regarding the company as possible before purchasing a stake in it.Correct answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for CLAT. Download more important topics, notes, lectures and mock test series for CLAT Exam by signing up for free.
Here you can find the meaning of Direction: Given below is a statement of legal principle followed by a factual situation. Apply the principle to the facts given below and select the most appropriate answer.Legal Principles: 1. A deceit occurs when a misrepresentation is made with the express intention of defrauding a party, subsequently causing loss to that party.2. “Misrepresentation” means and includes - the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true; any breach of duty which, without an intent to deceive, gains an advantage of the person committing it, or any one claiming under him, by misleading another to his prejudice, or to the prejudice of any one claiming under him; causing, however innocently, a party to an agreement, to make a mistake as to the substance of the thing which is the subject of the agreement.Fact: XY Company in its prospectus stated that the company was permitted to make engines that were powered by electricity, rather than by fuel. In reality, the company did not possess such a right as this had to be approved by the Government Board. Gaining the approval for such a claim from the Board was considered a formality in such circumstances and the claim was put forward in the prospectus with this information in mind. However, the claim of the company for this right was later refused by the Board. The individuals who had purchased a stake in the business, upon reliance on the statement, brought a claim for deceit against the defendant’s business.Decide. a)The company is liable for false representation as their claims were eventually turned out to be false.b)The company is liable as their false statements has resulted in causing loss to the shareholders.c)The company is not liable as the statement in its prospectus was simply incorrect and not fraudulent.d)The shareholders should have collected as much information regarding the company as possible before purchasing a stake in it.Correct answer is option 'C'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of Direction: Given below is a statement of legal principle followed by a factual situation. Apply the principle to the facts given below and select the most appropriate answer.Legal Principles: 1. A deceit occurs when a misrepresentation is made with the express intention of defrauding a party, subsequently causing loss to that party.2. “Misrepresentation” means and includes - the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true; any breach of duty which, without an intent to deceive, gains an advantage of the person committing it, or any one claiming under him, by misleading another to his prejudice, or to the prejudice of any one claiming under him; causing, however innocently, a party to an agreement, to make a mistake as to the substance of the thing which is the subject of the agreement.Fact: XY Company in its prospectus stated that the company was permitted to make engines that were powered by electricity, rather than by fuel. In reality, the company did not possess such a right as this had to be approved by the Government Board. Gaining the approval for such a claim from the Board was considered a formality in such circumstances and the claim was put forward in the prospectus with this information in mind. However, the claim of the company for this right was later refused by the Board. The individuals who had purchased a stake in the business, upon reliance on the statement, brought a claim for deceit against the defendant’s business.Decide. a)The company is liable for false representation as their claims were eventually turned out to be false.b)The company is liable as their false statements has resulted in causing loss to the shareholders.c)The company is not liable as the statement in its prospectus was simply incorrect and not fraudulent.d)The shareholders should have collected as much information regarding the company as possible before purchasing a stake in it.Correct answer is option 'C'. Can you explain this answer?, a detailed solution for Direction: Given below is a statement of legal principle followed by a factual situation. Apply the principle to the facts given below and select the most appropriate answer.Legal Principles: 1. A deceit occurs when a misrepresentation is made with the express intention of defrauding a party, subsequently causing loss to that party.2. “Misrepresentation” means and includes - the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true; any breach of duty which, without an intent to deceive, gains an advantage of the person committing it, or any one claiming under him, by misleading another to his prejudice, or to the prejudice of any one claiming under him; causing, however innocently, a party to an agreement, to make a mistake as to the substance of the thing which is the subject of the agreement.Fact: XY Company in its prospectus stated that the company was permitted to make engines that were powered by electricity, rather than by fuel. In reality, the company did not possess such a right as this had to be approved by the Government Board. Gaining the approval for such a claim from the Board was considered a formality in such circumstances and the claim was put forward in the prospectus with this information in mind. However, the claim of the company for this right was later refused by the Board. The individuals who had purchased a stake in the business, upon reliance on the statement, brought a claim for deceit against the defendant’s business.Decide. a)The company is liable for false representation as their claims were eventually turned out to be false.b)The company is liable as their false statements has resulted in causing loss to the shareholders.c)The company is not liable as the statement in its prospectus was simply incorrect and not fraudulent.d)The shareholders should have collected as much information regarding the company as possible before purchasing a stake in it.Correct answer is option 'C'. Can you explain this answer? has been provided alongside types of Direction: Given below is a statement of legal principle followed by a factual situation. Apply the principle to the facts given below and select the most appropriate answer.Legal Principles: 1. A deceit occurs when a misrepresentation is made with the express intention of defrauding a party, subsequently causing loss to that party.2. “Misrepresentation” means and includes - the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true; any breach of duty which, without an intent to deceive, gains an advantage of the person committing it, or any one claiming under him, by misleading another to his prejudice, or to the prejudice of any one claiming under him; causing, however innocently, a party to an agreement, to make a mistake as to the substance of the thing which is the subject of the agreement.Fact: XY Company in its prospectus stated that the company was permitted to make engines that were powered by electricity, rather than by fuel. In reality, the company did not possess such a right as this had to be approved by the Government Board. Gaining the approval for such a claim from the Board was considered a formality in such circumstances and the claim was put forward in the prospectus with this information in mind. However, the claim of the company for this right was later refused by the Board. The individuals who had purchased a stake in the business, upon reliance on the statement, brought a claim for deceit against the defendant’s business.Decide. a)The company is liable for false representation as their claims were eventually turned out to be false.b)The company is liable as their false statements has resulted in causing loss to the shareholders.c)The company is not liable as the statement in its prospectus was simply incorrect and not fraudulent.d)The shareholders should have collected as much information regarding the company as possible before purchasing a stake in it.Correct answer is option 'C'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice Direction: Given below is a statement of legal principle followed by a factual situation. Apply the principle to the facts given below and select the most appropriate answer.Legal Principles: 1. A deceit occurs when a misrepresentation is made with the express intention of defrauding a party, subsequently causing loss to that party.2. “Misrepresentation” means and includes - the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true; any breach of duty which, without an intent to deceive, gains an advantage of the person committing it, or any one claiming under him, by misleading another to his prejudice, or to the prejudice of any one claiming under him; causing, however innocently, a party to an agreement, to make a mistake as to the substance of the thing which is the subject of the agreement.Fact: XY Company in its prospectus stated that the company was permitted to make engines that were powered by electricity, rather than by fuel. In reality, the company did not possess such a right as this had to be approved by the Government Board. Gaining the approval for such a claim from the Board was considered a formality in such circumstances and the claim was put forward in the prospectus with this information in mind. However, the claim of the company for this right was later refused by the Board. The individuals who had purchased a stake in the business, upon reliance on the statement, brought a claim for deceit against the defendant’s business.Decide. a)The company is liable for false representation as their claims were eventually turned out to be false.b)The company is liable as their false statements has resulted in causing loss to the shareholders.c)The company is not liable as the statement in its prospectus was simply incorrect and not fraudulent.d)The shareholders should have collected as much information regarding the company as possible before purchasing a stake in it.Correct answer is option 'C'. Can you explain this answer? tests, examples and also practice CLAT tests.
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