Albert found a stone in his yard and took it to Bob,a jeweler,for evaluation.Although Bob knew what the stone was,he told Albert that he wasn't sure as to the nature of the stone,but that he thought it was a topaz.Bob then offered to buy the stone for $25 and Albert agreed.Later Albert found out the stone was an uncut diamond worth about $700.The sale:
A) was a valid contract that should be enforced by the law.
B) can be voided based upon fraud in the execution.
C) can be voided based upon fraud in the inducement.
D) can be voided based upon mistake as to the identity of the subject matter.

Question

Quizplus · Accepted Answer

The sale can be voided based upon fraud in the inducement. Bob intentionally misled Albert by misrepresenting the nature of the stone, which induced Albert to sell it for a significantly lower price than its actual value. Therefore, Albert can rescind the contract and seek return of the stone or the fair market value of the uncut diamond.

Albert Found a Stone in His Yard and Took It