Keri went to Crandon's computer outlet with her brother Paul, who was buying a laser printer. While she was waiting for him, she saw a poster saying the store was collecting funds for a special computer for a student recently disabled in an accident. The seller induced Paul to buy the model "X" printer by stating as a fact that the printer could interface with his iMac. Paul paid $400 for the printer. Also, Keri gave $15 to the student fund after the seller confirmed he was collecting for the student's computer. Later Paul and Keri learned that neither statement was true-the printer didn't work with Paul's computer and the store was doing nothing for the student-and that the seller didn't believe that either statement was true when he made them. On these facts, which of the following is true?
A) Keri could sue for damages due to a misunderstanding.
B) Paul could sue for damages due to an innocent misrepresentation.
C) Paul could sue for rescission because of the misrepresentation.
D) The court would rescind Paul's contract only with proof that the seller knew his statement was False.
E) Only Keri has a remedy because she had been fraudulently misrepresented.

Question

Quizplus · Accepted Answer

Paul can sue for rescission because he relied on the seller's misrepresentation that the printer was compatible with his iMac. Rescission means that the contract is cancelled, and both parties must return any benefits they received from it. The misrepresentation was innocent because the seller did not know the statement was untrue, but it was still material because it induced Paul to buy the printer. Keri cannot sue for damages because she did not suffer any financial loss, and there was no fraudulent misrepresentation involved in her donation to the student fund. The court does not require proof that the seller knew the statement was false to rescind the contract in cases of innocent misrepresentation.

Keri Went to Crandon's Computer Outlet with Her Brother Paul