Question

Lauren wants to open a floral shop in a downtown business district. She doesn't have funds enough to purchase inventory and pay six months' rent up front. Lauren approaches a good friend, Jamie, to discuss the possibility of Jamie investing funds and becoming a 25% partner in the business. After a lengthy discussion, Jamie agrees to invest. Eight months later, Jamie discovered that Lauren has not be honest with her regarding some aspects of the business financial operation. In order for Jamie to sue Lauren for fraud, all the following must be true except:_________.

A) Jamie's decision to invest was primarily based on Lauren's assertion that she had prior floral retail experience.
B) Jamie has suffered a substantial loss in her investment because of Lauren's deception.
C) Jamie trusted and relied on Lauren's representation of the business financial operation.
D) Jamie found Lauren dishonest because she does not always reconcile the business cash account on a timely basis

Answer 1

D) Jamie found Lauren dishonest because she does not always reconcile the business cash account on a timely basis

Step-by-step explanation:

Fraud is the act of converting property or right that does not belong to one to himself by deception. It is for financial or personal gain.

In the given scenario Lauren convinced Jamie to invest funds and become a 25% partner in the business.

Eight months later, Jamie discovered that Lauren has not be honest with her regarding some aspects of the business financial operation.

To prove fraud Jamie must show Lauren acted deceptively to convert money for her personal or financial gain.

The only option that does not qualify as fraud is she does not always reconcile the business cash account on a timely basis.

There is no deception in this case only a delayed activity by Lauren