A Report

On
Fraudulent, Negligence and Innocent Misrepresentation in the
Employment Context: A case study on Coca-Cola Company.
 A Report
on
Fraudulent, Negligence and Innocent Misrepresentation in the Employment
Context: A case study on Coca-Cola Company.

Prepared by
S.L no Name ID
01 Helal Uddin 024-075
02 Md. Irfanul Hoque 024-079
03 Rasel Ahemed 024-084
04 Md. Hafizul Islam 024-089
05 Sudiptou Biswas 024-093
O6 Imran Hossan 024-095
07 Md Khushbu Hossain 024-101
O8 Sajal Gohu Santou 024-104

BBA Program (23rd Batch, Sec-A), 2016-17

Supervisor
Ms. Tanuza Nath
Assistant Professor

Department of Management
Faculty of Business Studies
University of Dhaka

Date of Submission
22nd April, 2018
 LETTER OF TRANSMITTAL

2nd April, 2018

Tanuza Nath
Assistant professor,
Department of Management,
University of Dhaka.

Subject: Submission of the Report on “Fraudulent, Negligence and Innocent

Misrepresentation in the Employment Context”.

Dear Ma’am

With due honour ,we ,on behalf of our group “Rainbow”, wish to inform you that it was a
matter of great pleasure as well as learning to prepare report on ‘’fraudulent, negligent and
innocent misrepresentation in the employment context’’ under the course of commercial law
. We are thanking you a lot for giving us such an opportunity. We collected and studied
materials in due time and analysed these and tried our best to prepare the report. Actually,
we enjoyed it in preparing this and learnt a lot. We have worked hard to prepare this.

Though we have put our best efforts but due to limitation of our knowledge there might be
some mistake and omissions in our report. We hope that you will overlook those mistakes
with kind consideration that we are still learners and will give us the necessary suggestions
for the improvement of our quality in future.

We will be highly obliged if the content of the report is acceptable to you.

Sincerely,
Md. Irfanul Hoque
On behalf of the group “Rainbow”
Batch: 23rd, Section: A
Department of Management

………………..
Signiture
 Acknowledgement

As per requirement of the bachelor of business administration program our venerable course
teacher Tanuza Nath has assigned a report in the course curriculum. Our assigned report is
“fraudulent, negligent and innocent misrepresentation in the employment context”. We
express our sincere gratitude to our honourable course teacher Tanuza Nath, assistant
professor of the Department of Management, for her guidance and advice in preparing the
assigned report. This report has enriched our knowledge about commercial law.
Finally, thanks are also due to our group members who have done their job enthusiastically
and perfectly.
Executive summary
The report has been prepared on fraudulent, negligence and innocent misrepresentation in the
employment context on Coca Cola Company. The actions for preparing this paper had started when
we were instructed to study on this topic by our course teacher-Ms. Tanuza Nath under course of
commercial law. In this report, three kinds of misrepresentation has been founded and analysed on
the multinational company of Coca Cola which is the most famous American company for the
production of soft drinks. But aside from their historical success, the Coca Cola Company is
still atypical business that is affected and at the same time affecting the different type of
communities. Here the implementation of commercial law on fraudulent, negligence and innocent
misrepresentation has been discussed briefly. In fraudulent includes all acts committed by a person
with a view to deceive another person. When a party makes a false statement, not purposefully but
carelessly, believing the misrepresentation is true, the doctrine of negligent misrepresentation
arises. Again misrepresentation arises when the representation made is inaccurate but the
inaccuracy is not due to any desire to defraud the other party. There is no intention to deceive.

Data for this report has been collected through exploring the secondary sources, where included are
text book, internet, newspaper. The report may not contain all the data required for the
limitation of our study. That all happened for lack of enough information.

The report has been discussed various cases which include the Coca Cola company. In
fraudulent, when the untrue statement is made intentionally, to trick the other party. The impact
of fraud can have on an organization can be monumental. Not only can it have a significant
financial impact, but, depending on the type and severity, it can also destroy an organization.
The fact, however, that the misrepresentation was made carelessly or incompetently does not
render it fraudulent; and thus no fraudulent intent or scienter is required for this cause of action,
merely negligence. A person is negligent if he fails to exercise ordinary care to avoid injury to
other persons or their property. In other words, he failed to do something a reasonably careful
person would do or he did something a reasonably careful person would not do under the same
or similar circumstances. In an innocent misrepresentation, there is no requirement of fault,
intentional or careless, at all; rather, the plaintiff merely needs to demonstrate that a false
representation was made with an intent to induce the plaintiffs reliance thereon, and that the
plaintiff did in fact justifiably rely on the information to his or her detriment.

Concluding the study, the principal purposes of this article were to examine and to clarify the
legal concept in a particular context. Accordingly, it was necessary to differentiate the tort from
contract ramifications of fraud, to define and distinguish fraudulent, negligent, and innocent
misrepresentation.
 Chapter 1: Introduction of the Study

1.1 Origin of the report:

The study of this report has been done by us, the students of “Department of Management
(23rd batch, Section-A), university of Dhaka.” The origin of our study begins at the moment
when our honourable course teacher Ms. Tanuza Nath instructed us to make a report on
“fraudulent, negligent and innocent misrepresentation in the employment context” under
the course commercial law (course code: MGT-204)

We are instructed to do this study, so that we may learn something great and enrich ourselves
with the light of knowledge. We would like to thank her for giving us the opportunity.

1.2 Background of the study

A study on fraudulent, negligence and innocent misrepresentation in Coca-Cola company ltd.

has been conducted by us where we got to know about the practice of the stated problems in a
practical context. Generally fraudulent is when the untrue statement is made intentionally, to
trick the other party. Negligence is when a representation made carelessly and in breach of duty
to take reasonable care that the representation is accurate. When the false statement was made
without any knowledge of the same or with no bad intent, it qualified for innocent
misrepresentation. These three phenomenon are often experienced in Coca-Cola Company in
employment context. While dealing with clients, agents often get claimed about being fraud or
negligent or doing misrepresentations innocently. Several cases that had been sued in previous
against different agents or realtors have been studied by us for making this report to know about
the practical experience of these three faults. The legal, academic and business communities
call out for clearity in this important area of the law, yet the very word ‘fraud’ is it’s a
misnomer. Fraud, or more properly, traditionally designated at deceive represents just one part
of the corpus of misrepresentation law. In Coca-Cola company, this three kinds of phenomenon
runs throughout its internal and external activities in employment context.

In this company, there can be fraudulent, negligence and innocent misrepresentation of facts
both on the part of the seller and buyer. In case of when constituting a transections both parties
are directly or indirectly involve with those phenomena. When the seller are servicing to
provide their clients , there can be fraudulent on the part of seller while selling products or
goods, again there can be negligence about disclosure of several facts of products and also there
can be innocent misrepresentation because of the false statement without any knowledge
provide by the seller.
1.3 Problem Statement

Now a days, Fraudulent, negligence and innocent misrepresentation are most talked topics
because of this are the danger in several contracts. When these three problems occur, these
cause different harassments to the clients and sometimes to both parties because there are
sometimes misconduct between the parties. Most of the time the agent party gets sued for these
three faults and the client party gets harassed as every contract. It is too big deal to ignore such
problems. As a result they have to file cases to solve these problems and that is another kind of
harassment to them in the long run. When the buyer sued against the company, company’s
goodwill will be damaged .And that’s why, the capability of selling will be reduced. The seller,
in order to avoiding sues, should be more concerned about disclosing every fact that the
opposite party crucially needs to know so that negligence doesn’t occur.

1.4 Purposes of the report

The purpose of this report is to be depicted –

 Fraudulent, negligence and innocent misrepresentation in a employment context of

Coca-Cola Company.
 How fraudulent, negligence and innocent misrepresentation occurs in a particular
industry.
 Reflection of our knowledge about fraudulent, negligence and innocent
misrepresentation in the employment context.
 How can people avoid and overcome these three problems.

1.5 Significance of the study

The significance of the study will help the reader to understand the fraudulent negligent and
innocent misrepresentation much. It is a burning question in the new era of manufacturing
companies. That’s why it is crucial about those terms. In our study, one can know how those
phenomena may happen the effects of those problems, how people will suffer those problems
and how they will stricken those problems. This will help them to be aware of these problems
and help them to observe practical experiences which may help them in future circumstances.
1.6 Objective of the report

General Objectives: The general objective of our report is-

 To know about the fundamental concept of fraudulent, negligent and innocent

misrepresentation.

 To know the experiences of these problem in the practical life.

Specific Objectives: The specific objectives of our report are as follows:

 To know about the causes, effects and implementation of fraudulent, negligence and
innocent misrepresentation in the manufacturing organizations.
 To enrich our practical and theoretical knowledge about fraud, negligence and
innocent misrepresentation to working experience.

1.7 Scope of the study

The report about fraudulent, negligence and innocent misrepresentation in employment context
aims to gain observing and analyzing practical knowledge. We have tried to present different
cases that relate to fraud, misrepresentation and negligence on Coca-Cola Company. It will
also describe implementation of law in stated cases and some cases faced in real life. It will
provide our view and findings relating fraudulent, negligence and innocent misrepresentation
to a particular field like manufacturing company.

1.8 Limitation of the study

Main limitation of our report are described below

 Limitation of the time.

 Lack of available information.
 Lack of experience.
 Lack of technical resource.
 Lack of primary data

1.9 Source of data collection

We mainly collect data from secondary source because, primary source data are not available.
We collect data from text book, internet, company profile and newspaper.

Chapter 2: Profile of Coca Cola Company Ltd

2.1 Overview of Coca-Cola Company

The Coca-Cola company is the ‘world’s largest beverage company and is the leading producer
and marketer of soft drinks. Today, Coca-Cola is consumed throughout the world at the rate of
more than 600 million times per day and this figure is continuing to rise. However Coca-Cola
is not the sort of company to live in its past glories instead it looks to the future as a challenge
and constantly seeks new markets and ways of increasing its market share
in maerket. It is the world’s largest producer and distributer of syrups and concentrates for sof
t drink. As we all know, the Coca is today’s one of the biggest corporation that offers different
refreshment in form of a soft-drink. But aside from their historical success, the Coca Cola
Company is still atypical business that is affected and at the same time affecting the different
type of communities. Coca-Cola has sold more than one billion servings every day. More than
10,450 beverages are consumed every second. The company achieved earnings of
$4,347,000,000 in 2003. It is presentation all seven continents and is recognized by 94% of the
world population. Coca-Cola used numerous technologies to achieve its rise to the top of the
soft drink industry, defining new technologies and establishing paradigms that popped the
status quo like a cap from a soda bottle. Through technology, Coca-Cola perfected Coke as a
beverage and spread it throughout the world. Even today, the US soft drink industry is
organized on this principle. "The Coca-Cola Company" is now the largest soft drink company
in the world. Every year 800,000,000 servings of just "Coca-Cola" are sold in the U.S alone.

2.1 History of Coca-Cola Company

Coca-Cola Enterprises, established in 1986, is a young company by the standards of the Coca-
Cola system. Yet each of its franchises has a strong heritage in the traditions of Coca-Cola that
is the foundation for this Company. The Coca-
Cola Company traces it’s beginning to 1886, when an Atlanta pharmacist, Dr John Pemberton,
began to produce Coca-Cola syrup for sale in fountain drinks. However the bottling business
began in 1899 when two Chattanooga businessmen, Benjamin F. Thomas and Joseph
B.Whitehead, secured the exclusive rights to bottle and sell Coca-Cola for most of the United
States from The Coca-Cola Company. The Coca-Cola bottling system continued to operate as
independent, local businesses until the early 1980s when bottling franchises began to
consolidate. In 1986, The Coca-Cola Company merged some of its company-owned operations
with two large ownership groups that were for sale, the John Lupton franchises and BCI
Holding Corporation's bottling holdings, to form Coca-Cola Enterprises Inc. The Company
offered its stock to the public on November 21, 1986, at a split-adjusted price of $5.50 a share.
On an annual basis, total unit case sales were 880,000 in 1986.In December 1991, a merger
between Coca-Cola Enterprises and the Johnston Coca-Cola Bottling Group, Inc. (Johnston)
created a larger, stronger Company, again helping accelerate bottler consolidation. As part of
the merger, the senior management team of Johnston assumed responsibility for managing the
Company, and began a dramatic, successful restructuring in1992.Unit case sales had climbed
to 1.4 billion, and total revenues were $5 billion.

2.3 Mission
To refresh the world in mind, body and spirit. To inspire moments of optimism and happiness
through brands and actions.

2.4 Vision:
The vision of Coca-Cola is the framework for the guides of every aspects of its business. It is
presented in 6Ps.

1. People: Be a great place to work where people are in inspired to be the best they can
be.
2. Portfolio: Bring to world a portfolio of quality beverage brands anticipate and satisfy
people desires and needs.
3. Partners: Nature a wining network of customers and suppliers together they create
mutual, enduring value.
4. Planet: Be a responsibe citizen that makes a different by helping build and support
sustainable communities.
5. Profit: Maximize long term return to shareowners while being midful of our overall
responsibilities.
6. Productivity: Be a highly effective lean and fast moving organization.

2.5 Product portfolio of Coca Cola Company

Product description are given below:
COCA-COLA
Coca-Cola is the most popular and biggest-selling soft drink in history, as well as one of the
most recognizable brands in the world.

SPRITE
Introduced in 1961, Sprite is the world's leading lemon-lime flavored soft drink. Sprite is sold
in more than 190 countries and ranks as the No. 3 soft drink worldwide

FANTA
Introduced in 1940, Fanta is the second oldest brand of The Coca-Cola Company and our
second largest brand outside the US. Fanta Orange is the leading flavor but almost every fruit
grown is available as a Fanta flavor somewhere.

DIET COCK
Diet Coke, also known as Coca-Cola light in some markets, is a sugar- and calorie-free soft
drink. It was first introduced in the United States on August 9, 1982, as the first new brand
since 1886 to use the Coca-Cola Trademark.

COCA- COLA ZERO

Coke Zero was Coca-Cola's largest product launch in 22 years and launched in 2005, reaching
billion-dollar status in 2007. Coca-Cola Zero offers great Coke taste, uplifting refreshment and
zero sugar.

COCA- COLA LIFE

Coca-Cola Life is a reduced-calorie cola sweetened with cane sugar and stevia leaf extract.

DASANI
Dasani delivers fresh taste with a clean, fresh style. DASANI DROPS is the vibrant and
delicious drop that transforms everyday moments into something deliciously fun, unexpected
and colourful.

SIMPLY BEVEREGE
Simply Beverages are premium, gently pasteurized, not from concentrate 100% Juices and
Juice Drinks. Available in nine 100% Orange Juice and Orange Juice blends, five lemonades,
and eight additional variety juices and juice drinks. Simply Lights offers a great tasting Simply
beverage, with less sugar and fewer calories. Simply light is available in several Simply Light
Orange beverages and Simply Light Lemonades.

MELLO YELLO
The smooth citrus taste of Mello Yello has refreshed people's thirst for over two decades. Its
unique taste and confident, in-control style sets it apart from other soft drinks. Mello Yello
highlights the smooth choices in life - because when you drink Mello Yello, everything goes
down easy.

2.6 Organogram of Coca-Cola Company

2.7 Financial highlights of Coca-Cola Company
Chapter 3: Analysis and Findings of the Study
3.1 Analysis of the study

3.1.1 Fraudulent
In law, fraud is deliberate deception to secure unfair or unlawful gain, or to deprive a victim of
a legal right. On other hand, fraud is when the untrue statement is made intentionally, to trick
the other party.
The impact of fraud can have on an organization can be monumental. Not only can it have a
significant financial impact, but, depending on the type and severity, it can also destroy an
organization.

Explanation of various types of fraudulent that mostly affect in a compony:

Financial statement fraud.
Although it’s less common, financial statement fraud can be the most damaging to a company.
Overstating revenue, earnings and assets – along with understating liabilities (or just plain
concealing them) are the most common activities found with this type of fraud.
Asset misappropriation.
Some of the more common types of fraud fall into the category of asset misappropriation, which
closely-held businesses are most susceptible to.
Skimming of cash and cash larceny.
This type of asset misappropriation consists of taking cash before it even enters the company’s
accounting system. It’s very hard to uncover (since it requires finding evidence of been
recorded yet) and it doesn’t require a lot of sophistication to execute, making it a popular choice
among those that commit fraud. Check tampering, accounts receivable skimming, fake billing
schemes, payroll schemes, fake or duplicate expense reimbursement schemes and inventory
schemes are also other common examples of asset misappropriation.
Theft of intellectual property and trade secrets.
As our world becomes increasingly driven by information and technology, an increase in the
theft of intellectual property and trade secrets is on the rise.
Consumer fraud.
Individuals targeted through cons, bogus telemarketing, email, Ponzi schemes, phishing, ID
theft and other schemes, are all victims of consumer fraud. Whether it’s an organization system
breach or bogus tax returns filed for large refunds, consumer fraud is on the rise. Companies
can also be victims of email phishing scams – especially spear phishing, which involves
sending targeted, disguised emails that contain malicious links.
Remedies for Fraudulent Misrepresentation:

Misrepresentation are civil offenses, meaning they are only causes of action that can be brought in civil
court. The general remedy in civil court for all types of misrepresentations. This means the
court will act like the transaction or contract never existed, and all parties are brought back to
the position they were in before the contract was formed. Fraudulent misrepresentation is
considered a more egregious offense than misrepresentation. Whereas a person can
innocently misrepresent a fact, fraudulent misrepresentation requires intent to misrepresent.
For this damages can also be awarded to the aggrieved party.

Case on Fraud

ATLANTA - Jeffrey David Shamp, a former Senior National Account Executive with The
Coca-Cola Company, was sentenced to two years and three months in prison for siphoning
over $400,000 in corporate American Express gift checks for his personal use.

“Corporate employees who steal hurt their employer, fellow colleagues, their customers, and
the community,” said United States Attorney Sally Quillian Yates. “By putting his personal
gain above all else, Shamp has earned this time in federal prison.”

“The United States Secret Service and our law enforcement partners will continue to take an
aggressive approach to arresting individuals who violate the trust of businesses to further their
personal financial gain,” said Reginald G. Moore, Special Agent in Charge of the United States
Secret Service, Atlanta Field Office.

“This sentence is a message to others that there are consequences for taking what doesn’t
belong to you,” stated Veronica F. Hyman-Pillot, IRS Criminal Investigation, Special Agent in
Charge. “Individuals cannot fraudulently enrich their bank accounts and expect to go
unpunished.”

According to United States Attorney Yates, the charges, and other information presented in
court: Jeffrey Shamp worked for The Coca-Cola Company from approximately July 2002 to
November 2011, most recently as a Senior National Account Executive based in
Massachusetts. In his position, Shamp was authorized to order American Express (AMEX)
gift checks to be used as part of a sales incentive program for Coca-Cola’s customers. From
approximately November 2005 through September 2011, Shamp fraudulently obtained AMEX
gift checks under the false pretense that the checks would be used as part of Coca-Cola’s sales
incentive program, when in fact Shamp used them to pay for over $400,000 in personal
expenses, including alimony and rent payments, and as gifts to friends and relatives.

Shamp, 40, of Cincinnati, Ohio, pleaded guilty to one count of wire fraud before United States
District Court Steve C. Jones on February 27, 2014. In addition to his two year and three month
sentence, Shamp was ordered to pay $411,550 in restitution to The Coca-Cola Company.
This case was investigated by the United States Secret Service and the Internal Revenue
Service Criminal Investigation.

3.1.2 Negligence
When a party makes a false statement, not purposefully but carelessly, believing the
misrepresentation is true, the doctrine of negligent misrepresentation arises. A person is
negligent if he fails to exercise ordinary care to avoid injury to other persons or their property.
In other words, he failed to do something a reasonably careful person would do or he did
something a reasonably careful person would not do under the same or similar circumstances.
For example, if a person causes an auto accident because he was driving faster than was safe
for the existing conditions, the resulting lawsuit will likely include a negligence claim

Elements of negligence claims:

Somethings must be stablished by anyone who wants to sue in negligence. These are what are
called the "elements" of negligence.
Most jurisdictions say that there are four elements to a negligence action.

1. duty: the defendant has a duty to others, including the plaintiff, to exercise reasonable
care,
2. breach: the defendant breaches that duty through an act or culpable omission,
3. damages: as a result of that act or omission, the plaintiff suffers an injury, and
4. causation: the injury to the plaintiff is a reasonably foreseeable consequence of the
defendant's act or omission.
Some jurisdictions narrow the definition down to three elements: duty, breach and proximately
caused harm Some jurisdictions recognize five elements, duty, breach, actual cause, proximate
cause, and damages However, at their heart, the various definitions of what constitutes
negligent conduct are very similar.

Remedies for Negligent Misrepresentation:

Misrepresentations are civil offenses, meaning you can only sue for them in civil court (the
criminal equivalent of these offenses is called "false pretenses") The general remedy in civil
court for all types of misrepresentations is that of rescission. This means the court will act like
the transaction or contract never existed, and everyone goes back to the way they were.

Case on Negligence

Plaintiff, a waitress in a restaurant, was injured when a bottle of Coca Cola broke in her hand.
She alleged that defendant company, which had bottled and delivered the alleged defective
bottle to her employer, was negligent in selling "bottles containing said beverage which on
account of excessive pressure of gas or by reason of some defect in the bottle was dangerous
... and likely to explode." This appeal is from a judgment upon a jury verdict in favor of
plaintiff.

Defendant's driver delivered several cases of Coca Cola to the restaurant, placing them on the
floor, one on top of the other, under and behind the counter, where they remained at least thirty-
six hours. Immediately before the accident, plaintiff picked up the top case and set it upon a
near-by ice cream cabinet in front of and about three feet from the refrigerator. She then
proceeded to take the bottles from the case with her right hand, one at a time, and put them into
the refrigerator. Plaintiff testified that after she had placed three bottles in the refrigerator and
had moved the fourth bottle about eighteen inches from the case "it exploded in my hand." The
bottle broke into two jagged pieces and inflicted a deep five-inch cut, severing blood vessels,
nerves and muscles of the thumb and palm of the hand. Plaintiff further testified that when the
bottle exploded, "It made a sound similar to an electric light bulb that would have dropped. It
made a loud pop." Plaintiff's employer testified, "I was about twenty feet from where it actually
happened and I heard the explosion." A fellow employee, on the opposite side of the counter,
testified that plaintiff "had the bottle, I should judge, waist high, and I know that it didn't bang
either the case or the door or another bottle ... when it popped. It sounded just like a fruit jar
would blow up. ..." The witness further testified that the contents of the bottle "flew all over
herself and myself and the walls and one thing and another."

The top portion of the bottle, with the cap, remained in plaintiff's hand, and the lower portion
fell to the floor but did not break. The broken bottle was not produced at the trial, the pieces
having been thrown away by an employee of the restaurant shortly after the accident. Plaintiff,
however, described the broken pieces, and a diagram of the bottle was made showing the
location of the "fracture line" where the bottle broke in two.

One of defendant's drivers, called as a witness by plaintiff, testified that he had seen other
bottles of Coca Cola in the past explode and had found broken bottles in the warehouse when
he took the cases out, but that he did not know what made them blow up.

Plaintiff then rested her case, having announced to the court that being unable to show any
specific acts of negligence she relied completely on the doctrine of res ipsa loquitur.

3.1.3 Innocent Misrepresentation

Innocent Misrepresentation arises when the representation made is inaccurate but the
inaccuracy is not due to any desire to defraud the other party. There is no intention to deceive.
Under contracts law, innocent misrepresentation can serve as a valid cause of action. Thus,
even if the defendant did not intend to make a misrepresentation, they may still be held liable
for the plaintiff’s losses under the innocent misrepresentation theory.

Causes of Innocent Misrepresentation:

1. Unwarranted assertion
The positive assertion in a manner not warranted by the information of the person
making it, of that which is not true, though he believes is to be true.

2. Breach of duty
Any breach of duty which without an intent to deceive, gains an advantage to the person
committing it, or anyone claiming under him, by misleading another to his prejudice or
to the prejudice of anyone claiming under him.

3. Innocent mistake
Causing however innocently a party to an agreement to make a mistake as to the
substance of the thing which is the subject of the agreement.

Remedies for Innocent Misrepresentation

The most common remedy for innocent misrepresentation in a contract claim is contract
rescission. This is where the court orders the entire contract to be cancelled, in order to restore
the parties to their positions before entering into the agreement. In some cases the parties may
be allowed to write a new contract in light of the new facts regarding the subject matter,
especially if the parties are still willing to work together.
In some jurisdictions, a court may issue a monetary damages award for the plaintiff, if they
decide that it is equitable to do so. This is usually only an option where the plaintiff has
suffered great financial losses as a result of the misrepresentation, or where rescission is not an
adequate remedy.

Case on Innocent Misrepresentation:

The non-profit organisation, Praxis Project, wants to stop Coca-Cola and the American
Beverage Association (ABA) from “deceiving the public on the science linking obesity and
related diseases to regular consumption of sugar-sweetened beverages” and to stop them from
marketing their drinks to children.
“Despite widespread agreement in the scientific and medical communities that sugar-
sweetened beverages are a primary cause of obesity, type 2 diabetes and cardiovascular disease
[heart attacks and strokes]”, Coca-Cola and the ABA continued to deny this and “misrepresent
the science”, according to court papers filed in the North California District Court.
The three main tactics of Coke’s alleged “misrepresentation”, according to the court papers,
involve:

 “secretly funding and publicly promoting biased scientific research”

 blaming obesity on lack of exercise, rather than diet; and

 running “false and misleading advertising campaigns”.

This appeal is from a judgment upon a jury verdict in favor of plaintiff.

3.2 Findings of the study:

Fraudulent
From the study we have gained that fraud is deliberate deception to secure unfair or unlawful
gain, or to deprive a victim of a legal right where a fraud victim may sue the fraud perpetrator
to avoid the fraud or recover monetary compensation. In fraudulent the buyers become victim
because of their lack of knowledge about the contract. To avoid the contract the buyer must
examine the given information before making any contract. Defects in the good or service may
be hidden from the buyer, and only known to the seller. Under the principle of caveat emptor,
the buyer cannot recover damages from the seller for defects on the property that rendered the
property unfit for ordinary purposes. The only exception was if the seller actively concealed
hidden defects or otherwise made material misrepresentations amounting to fraud.

Negligence

When a party makes a false statement, not purposefully but carelessly, believing the
misrepresentation is true, the doctrine of negligent misrepresentation arises. Pursuant to this
doctrine, a misrepresentation made with an honest belief as to its truth nonetheless may be
deemed negligent, and thus actionable. A cause of action can arise due to a failure to exercise
reasonable care and competence in ascertaining the true underlying facts, obtaining the
information, communicating the representation, or due to a failure to exercise the knowledge,
skill, or competence required of a particular business, profession, employment, or position, for
example, by failing to undertake a proper investigation. The fact, however, that the
misrepresentation was made carelessly or incompetently does not render it fraudulent; and thus
no fraudulent intent or scienter is required for this cause of action, merely negligence.
Innocent Misrepresemtation

When a party makes a representation that he or she honestly believes to be true, and there is no
negligence in the formation of this belief, yet the misrepresentation actually falsely represents
material facts, the misrepresenting party is only liable for an innocent misrepresentation, not a
fraudulent or negligent one. If such an innocent misrepresentation occurs, the aggrieved party
can rescind the contract or transaction as well as seek restitution, but the party cannot ordinarily
recover damages In an innocent misrepresentation case, there is no requirement of fault,
intentional or careless, at all; rather, the plaintiff merely needs to demonstrate that a false
representation was made with an intent to induce the plaintiffs reliance thereon, and that the
plaintiff did in fact justifiably rely on the information to his or her detriment. The nature of the
liability pursuant to the innocent misrepresentation theory is often described as appearing very
close to the contract action of breach of an express warranty.

Chapter 4: Conclusion

4.1 Conclusion:

The principal purposes of this article were to examine and to clarify the legal concept in a
particular context. Accordingly, it was necessary to differentiate the tort from contract
ramifications of fraud, to define and distinguish fraudulent, negligent, and innocent
misrepresentation, and, in particular, to emphasize and to analyse in detail the numerous
requisite elements of, and defence to, the various misrepresentation actions, notably by
providing extensive employment case law illustrating the many legal requirements. It also was
critical to underscore and to explain the difficulties in pleading and proving fraudulent
negligence innocent misrepresentation in particular.
References