Final answer:
Misrepresentation occurs when an applicant intentionally fails to disclose a material fact, which can affect the terms of a contract or agreement. The correct answer is option 3, Misrepresentation. It is distinct from related terms such as fraud, negligence, and breach of contract.
Step-by-step explanation:
When an applicant intentionally fails to make known a material fact, this is known as misrepresentation. Misrepresentation can occur in various contexts, including insurance applications, business transactions, or when entering into a contract. It involves providing false information or deliberately withholding information that is significant to the terms of a contract or agreement.
In the context of this question, the correct answer would be option 3, Misrepresentation. Fraud is a related term; it's more severe and includes malicious intent. Negligence is the failure to take proper care in doing something, which can be unintentional. Breach of contract is the failure to fulfill the terms of a contract agreed upon by the parties.