CSEET · Business Laws and Management · Introduction to Law
A company director is prosecuted by the State for fraud, and separately the company sues him for damages for the same act. Which statement is correct?
The State's prosecution is a criminal proceeding aimed at punishment, while the company's suit for damages is a civil proceeding enforcing its private right. A single act like fraud can give rise to both kinds of liability, handled in separate proceedings.
- ABoth proceedings must be civil because the act is single
- BThe prosecution is criminal and the suit for damages is civilCorrect
- CBoth proceedings are criminal as fraud is a public wrong
- DThe prosecution is civil and the suit for damages is criminal
Explanation
One act can be both a public wrong and a private wrong. The State's prosecution to punish the offence falls under criminal law, while the company's claim for damages enforces a private right under civil law. The two proceedings can run separately.
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