Garland induces Jules to enter into a contract for the purchase of a Chef's Burger House restaurant. Garland knowingly misrepresents a number of material features about the restaurant and the business. When Jules discovers the truth,he can
A)not rescind the contract because Jules assumed the risk that the bargain would prove to be different from what he thought.
B)rescind the contract on the basis of fraud.
C)rescind the contract on the basis of mistake.
D)rescind the contract on the basis of undue influence.

Question

Quizplus · Accepted Answer

Jules can rescind the contract on the basis of fraud since Garland knowingly misrepresented material features about the restaurant and the business. Rescinding the contract means that Jules can seek to undo the contract and be put back in the position they were in before the contract was made. Option A is incorrect because it assumes that Jules assumed the risk of misrepresentation, which may not be the case. Option C is also incorrect because mistakes are unilateral and do not involve the other party's deceitful conduct. Option D, undue influence, is not applicable because there is no evidence that Garland exercised any undue influence over Jules.

Garland Induces Jules to Enter into a Contract for the Purchase