As soon as the case of _Derry_ v. _Peek_ had established, as the general rule of law, that a merely negligent misstatement is not actionable, a statutory exception was made to the rule in the case of directors and promoters of companies who publish prospectuses and similar documents. By the Directors' Liability Act 1890, such persons are liable for damage caused by untrue statements in such documents, unless they can prove that they had reasonable grounds for believing the statements to be true. It is also to be observed that, though damages cannot be recovered in an action for a misrepresentation made with an honest belief in its truth, still any person induced to enter into a contract by a misrepresentation, whether fraudulent or innocent, is entitled to avoid the contract and to obtain a declaration that it is not binding upon him. This is in accordance with the rule of equity, which since the Judicature Act prevails in all the courts. Whether the representation is fraudulent or innocent, the contract is not void, but voidable. The party misled must exercise his option to avoid the contract without delay, and before it has become impossible to restore the other party to the position in which he stood before the contract was made. If he is too late, he can only rely on his claim for damages, and in order to assert this claim it is necessary to prove that the misrepresentation was fraudulent. Fraud, in its wider sense of dishonest dealing, though not a distinct cause of action, is often material as preventing the acquisition of a right, for which good faith is a necessary condition. Also a combination or conspiracy by two or more persons to defraud gives rise to liabilities not very clearly or completely defined. FRAUENBURG, a town of Germany, in the kingdom of Prussia, on the Frische Haff, at the mouth of the Bande, 41 m. S.W. from Koenigsberg on the railway to Elbing. Pop. 2500. The cathedral (founded 1329), with six towers, stands on a commanding eminence adjoining the town and surrounded by castellated walls and bastions. This is known as Dom-Frauenburg, and is the seat of the Roman Catholic bishop of Ermeland. Within the cathedral is a monument to the astronomer Copernicus bearing the inscription _Astronomo celeberrimo, cujus nomen et gloria utrumque implevit orbem_. There is a small port with inconsiderable trade. Frauenburg was founded in 1287 and received the rights of a town in 1310.