Business Law and the Regulation of Business 11th Edition by Richard Mann, Barry Roberts

Exercise 26

On February 10, Mrs. Sunderhaus purchased a diamond ring from Perel Lowenstein for $6,990. She was told by the company's salesman that the ring was worth its purchase price, and she also received at that time a written guarantee from the company attesting to the diamond's value, style, and trade-in value. When Mrs. Sunderhaus went to trade the ring for another, however, she was told by two jewelers that the ring was valued at $3,000 and $3,500, respectively. Mrs. Sunderhaus knew little about the value of diamonds and claims to have relied on the oral representation of the Perel Lowenstein's salesman and the written representation as to the ring's value. Mrs. Sunderhaus seeks rescission of the contract or damages in the amount of the sales price over the ring's value. Will she prevail? Explain.