Which statement differentiates misrepresentation from fraud?

• A. Puffins
• B. Abatement
• C. Misrepresentation can be unintentional, whereas fraud is intentional
• D. Fraud

Answer: (C)

The main distinction is about intent. Misrepresentation can occur when someone makes a false statement of fact that misleads another person, and it can be unintentional or a result of carelessness. Fraud, on the other hand, requires intentional deception — the statement is knowingly false or made with reckless disregard for the truth in order to mislead. Because of this difference in mindset, misrepresentation can happen without a guilty intent, while fraud is grounded in deliberate deceit. For example, claiming a car has never been in an accident when you honestly believe it’s true is misrepresentation; knowingly lying about the car’s accident history to persuade a buyer is fraud. The other options don’t address the crucial difference in intention, so they don’t explain how misrepresentation and fraud are distinguished.