Question

How are fraud and honest mistakes different? Fraud happens on accident. Honest mistakes are on purpose. Fraud is the most common type of unethical behavior. Honest mistakes rarely happen. Fraud is not a serious offense. Honest mistakes are very serious. Fraud happens on purpose. Honest mistakes happen on accident.

Answer 1

In order to distinguish between fraud and mistake, the main criterion is the deceiving party to lead into or leave the other party in error and thereby induce the latter to enter into the transaction. Intent to deceive has been established as the main component of the concept of fraud.

In brief: Mistake vs Misrepresentation • A mistake is inadvertent and only an error on the part of the person committing it while misrepresentation is often wilful or intentional, done with the intention of gaining wrongfully.