Question

on its advertisement, a company claims that it has funds in its possession that are in fact not available for payment of losses or claims. the company is guilty of

Answer 1

A company falsely asserting that it has funds for paying claims when it doesn't is engaging in fraudulent misrepresentation, a severe illegal business practice that can lead to legal action and loss of reputation.

Step-by-step explanation:

If a company claims to have funds in its possession for the payment of losses or claims and this assertion is untrue, the company could be guilty of fraudulent misrepresentation. This is an illegal business practice in which a company makes false statements or materially misleading claims to deceive others, often for financial gain or to maintain a certain market image. There could be severe legal consequences for a company engaging in such deceptive practices, including fines, penalties, and damages to be paid if found guilty in a court of law.

The act of falsely advertising the availability of funds might also be seen as a breach of consumer protection laws, which safeguard the rights of consumers against deceptive business practices. Regulatory bodies may take action against the company for misleading the public and for not adhering to the proper financial disclosure regulations required by law. Such deceitful acts can damage the trust between a company and its customers, investors, and possibly lead to a loss of reputation along with the aforementioned legal repercussions.

Answer 2

Misrepresentation.

Step-by-step explanation:

In this scenario, on its advertisement, a company claims that it has funds in its possession that are in fact not available for payment of losses or claims. The company is guilty of misrepresentation.

Misrepresentation can be defined as an untrue or misleading statement of fact made by a party to an individual or group of people to deceitfully lure or induce them to go into a contract. A company stating in its advert that it has funds in its possession but in the true sense or actual fact do not have the funds for payment of losses or claims; such a company is engaging in a fraudulent act and is liable to prosecution in any court of competent jurisdiction.