Martha was selling some land she owned in Florida to Mary.Martha told Mary that there was a golf course and swimming pool in the subdivision as part of the development,and that other improvements would be made soon.Martha knew that none of these improvements existed and none were planned.Mary believed Martha and bought the land for $100,000 when it was really only worth $20,000.Mary learns of the error and sues Martha for fraud.Which of the following statements best describes this situation?

Question

Quizplus · Accepted Answer

Martha committed fraud by making a false representation of a material fact with the intention to deceive Mary. Mary relied on that misrepresentation and suffered a $80,000 loss as a result. Therefore, Mary can rescind the contract and recover damages from Martha. Option A is incorrect because the misrepresentation concerned an important fact. Option B is incorrect because Mary suffered significant damages. Option C is incorrect because Martha acted with intent to deceive. Option E is incorrect because this is not a case of mutual mistake.

Martha Was Selling Some Land She Owned in Florida to Mary.Martha