Cengage Advantage Books: Business Law 9th Edition by Arnold Goldman ,William Sigismond

Exercise 23

Burns and his wife bought a new car from a dealer and financed it through the Manhattan Credit Co. The finance company assured Burns that it would take care of the insurance but in fact did not arrange for enough coverage. A few months after the car was purchased, the car was damaged beyond repair, and the insurance wasn't enough to cover the damage. Burns and his wife sued to cancel the contract of sale because of the false statements made by the finance company regarding the insurance coverage. Can the sale be legally canceled? (Manhattan Credit Co. v. Burns, 230 Ark. 418, 323 S.W.2d 206)