Which term describes the deliberate concealment of a known defect that a reasonable person would consider material?

• A. Fraud
• B. Misrepresentation
• C. Puffins
• D. Encapsulation

Answer: (A)

Deliberate concealment of a known defect that a reasonable person would consider material is fraud. Fraud centers on intentionally deceiving someone by hiding or misrepresenting important facts that would influence their decision. When someone knows about a defect and purposefully withholds that information, especially because the defect is material to the decision at hand, they’re engaging in deceptive conduct designed to induce reliance. A reasonable person would view the defect as significant in deciding whether to proceed, so hiding it can cause the other party to act under false assumptions and suffer harm.

Misrepresentation involves making an actual false statement, whereas concealment is deception by omission; concealment can still meet the fraud standard because it involves intentional withholding of a material fact. The other terms here don’t fit the scenario, since they aren’t describing this kind of deceptive withholding.