Ralph sold a motel to Steve by stating that he had paid $250,000 for it and that his net average annual profit from the business has been $40,000.In reality he paid $100,000 for the motel and has earned a net average annual profit of only $30,000.Steve made no attempt to verify the statements until after the transaction was completed.In this case:
A) Ralph has committed fraudulent misrepresentation.
B) Steve is bound by the contract, because he failed to verify the statements which were made to him.
C) Ralph has used economic duress to compel the sale.
D) All of these.

Question

Quizplus · Accepted Answer

Ralph has committed fraudulent misrepresentation by providing false information about the purchase price and profit of the motel, which induced Steve to enter into the contract.

Ralph Sold a Motel to Steve by Stating That He