Which of the following is true regarding the effect of an innocent misrepresentation on a contract?
A) It permits the party that was misled by the false statement to rescind the contract, but damages are not available.
B) It permits the party who made the false statement to rescind the contract.
C) It permits either the party that was misled by the false statement or the party who made the false statement to rescind the contract.
D) The contract is automatically void and of no effect, and the party who was misled may recover damages.
E) It permits either the party that was misled by the false statement or the party who made the false statement to rescind the contract, and it also makes the contract void and of no effect.

Question

Quizplus · Accepted Answer

Innocent misrepresentation allows the misled party to rescind the contract but does not entitle them to damages. This is because the misrepresentation, though false, was made without fraudulent intent.

Which of the Following Is True Regarding the Effect of an Innocent