Which of the following best describes the concept of 'puffery' in relation to fraudulent misrepresentation under the fraud triangle?

• A. Puffery refers to exaggerated statements that are generally not considered fraudulent misrepresentation because they are opinions rather than factual claims.
• B. Puffery involves the intentional omission of material facts, making it a form of fraud.
• C. Puffery is always considered fraudulent misrepresentation and exposes a business to liability.
• D. Puffery is illegal under all circumstances, regardless of intent or context.

Answer: (A)

Verified step by step guidance

1. Understand the concept of 'puffery' in the context of fraudulent misrepresentation. Puffery refers to exaggerated or hyperbolic statements that are typically considered opinions rather than factual claims. These statements are not usually actionable as fraud because they are not meant to deceive but rather to promote or advertise.
2. Analyze the options provided in the question. The goal is to identify which statement aligns with the definition of puffery and its legal implications.
3. Option 1: 'Puffery refers to exaggerated statements that are generally not considered fraudulent misrepresentation because they are opinions rather than factual claims.' This aligns with the definition of puffery, as it highlights that puffery is not typically considered fraud due to its subjective nature.
4. Option 2: 'Puffery involves the intentional omission of material facts, making it a form of fraud.' This is incorrect because puffery does not involve the omission of material facts; it is about exaggerated opinions, not factual misrepresentation.
5. Option 3 and 4: 'Puffery is always considered fraudulent misrepresentation and exposes a business to liability' and 'Puffery is illegal under all circumstances, regardless of intent or context.' These are incorrect because puffery is not inherently fraudulent or illegal, as it is based on opinions rather than factual claims.