Legal Question in Business Law in California

Re: Fraud

Hello again, I think I answered this one already, at least part 1. The standard of proof for civil fraud in California is "preponderance of the evidence." You can look up the California Supreme Court case -- Liodas v. Sahadi (1977) 19 Cal.3d 278 -- where this was decided. In so ruling, the Court relied upon Evidence Code section 115, which says that in civil matters the standard of proof is "preponderance of the evidence" except when otherwise specifically provided by law.

An example of negligent or reckless disregard for the truth or falsity of a statement might be as follows: A rural real-estate salesperson is showing a farm to a would-be buyer. The buyer asks, "Will I get enough water to grow hay?" The salesperson says, "Oh sure, this is a good water area!" when in fact the salesperson has no idea how much water it takes to grow hay and no idea whether farms in the area have productive wells or not.

The Civil Code uses the phrase "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 it to be true" instead of "negligent or reckless disregard," but it amounts to about the same thing. (Section 1572(2)).

Re: Fraud

1. Preponderance of the evidence.

2. Cal. Civil Code Section 1710 defines the four instances of fraud (deceit). The instance you mention refers to the situation where someone makes an assertion of fact, which is untrue, and which the person had no reasonable grounds for believing it to be true. This is to prevent someone from prevailing on an "I'm just stupid; I didn't lie" defense.