00 for a watch that was a fake. As the watch was not a real Beckham watch, but instead a cheap copy, Seller's representation that she had an Akers Silver Lady watch was a false representation about a material fact which induced Client to act in reliance thereon. Thus, the first and third elements of fraud are satisfied. The second element of Seller's knowledge of the false representation will be more difficult to establish. Client will argue that this element is satisfied for a number of reasons. First, Client will contend that Seller had prior actual knowledge that the watch was not a real Beckham and will have to prove this through the evidence, such as testimony from her friends or relatives that she knew its actual value. Even if Client cannot prove this, however, he will show that Seller knew the watch a fake based on the specialized information the fact she acquired from working in a watch shop. Such a job should have given her knowledge to identify a fake watch, which can then circumstantially be used to prove that she knew the watch was not real, or at least that she did not whether or not the watch was real. Evidence to this effect can be established via the testimony of her supervisors, co-workers and former customers at the shop.

It will be quite difficult for Client to prove the fourth element, that his action was not just in reliance on Sellers false representation, but justifiable as well. As stated above, Arkansas courts will not find fraud has occurred when the plaintiff through the exercise of reasonable diligence might have detected that the watch was a fake. Client determined that inspecting the watch in person, or even seeing a photograph of the...

In fact, upon stating this to Seller, Seller does not affirm the authenticity of the watch and Client still purchases it. As a result, it will be quite difficult indeed for Client to overcome the presumption that through due diligence he would not have followed through with the deal.
Client will counter this by arguing two things. First, he likely would have not been able to determine the watch's authenticity even if he had seen it prior to sale. Second, he was allowed to rely on the implied statement of authenticity by Seller based on her position of specialized knowledge of watches and her silence as to authenticity of the watch. There is a strong likelihood that Client's reliance on the representation will be justified based on these facts and the totality of the circumstance.

That Client was damaged, the fifth element of establishing a fraud cause of action, is self-evident. He paid $12,500.00 for a watch valued at only $100.00 and therefore has damages at least in the amount of $12,400.00. If the remaining elements can be established, he can certainly make a claim for damages.

Conclusion

Client has significant, though not insurmountable, obstacles to overcome in order to establish a claim for fraud. First, Client must produce evidence that proves that Seller had prior knowledge that the watch was a fake. Second, Client must show that he did not waive his right to a fraud action by failing to use due diligence prior to the sale. While by no means an open and shut case, Client is likely to succeed in doing this and prevail in his action for fraud.