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Jacqui Purchased a Business from Dickie

Question 43

Multiple Choice

Jacqui purchased a business from Dickie.During the pre-contractual negotiations, Dickie said that the business' records indicate that it earns a least $1 000 000 each and every year.That statement was true when it was made.However, a short time later, but before the contract was signed, Dickie learned that the manufacturer that supplied his business with the materials that it needed was going out of business.Dickie realized that the need to obtain supplies from another manufacturer would reduce the profitability of the business.Whether he or Jacqui was in charge, the business would earn only $700 000 per year.Afraid that the new information news would scare off Jacqui, Dickie decided to keep it to himself.Jacqui completed the purchase of Dickie's business, but was very disappointed when it earned only $700 000 in its first year.She now wants to sue Dickie.Which of the following statements is most likely to be TRUE?


A) While Jacqui probably is entitled to damages, she cannot possibly receive rescission because the contract has already been completed.
B) Dickie cannot be held liable because his statement was an opinion about the future.
C) Dickie cannot be held liable because Jacqui ought to have independently confirmed his statements.
D) Jacqui cannot successfully sue unless she can prove that Dickie's statements regarding the business's profits became a term of their contract.
E) Dickie may have made a misrepresentation because, given the change in circumstances, his silence distorted his previously accurate statement.

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