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Zara and Wahid Have a Lot of Money Invested with a Stockbroker

Question 16

Multiple Choice

Zara and Wahid have a lot of money invested with a stockbroker named Dion and also with other brokers.Zara and Wahid decided to divorce.Zara was really interested in investments,so the divorce decree provided that Zara would retain "all investment accounts," and Wahid would receive a "cash settlement" from funds the parties had in the bank.Six months after the divorce was final,it was discovered that Dion had absconded to parts unknown with all the money invested with him.Zara could have withdrawn the funds at the time of the divorce,before Dion left town,but she had no reason for concern and left the funds there for investment purposes.After discovering Dion's wrongdoing,Zara asked Wahid to renegotiate the divorce agreement,but he refused.Which of the following is the most likely result of their dispute if the court follows the decision of the court in Simkin v.Blank,discussed in the text?


A) The original divorce agreement will be rescinded,and the parties will be required to renegotiate the agreement because,regardless of whether or not Dion was guilty of fraud,the end result is that Zara did not receive the benefit of her bargain.
B) The original divorce agreement will be rescinded,and the parties will be required to renegotiate the agreement because Zara and Wahid were mutually mistaken in regard to investing with Dion.
C) The original divorce agreement will be rescinded,and the parties will be required to renegotiate the agreement because the investment accounts with Dion were a significant basis of the divorce agreement,and Dion's fraud caused termination of that contract.
D) The original divorce agreement will be enforced only in part because based on their mutual mistake in regard to investing with Dion,the parties will be required to renegotiate the part of the contract involving the investments with Dion.
E) The original divorce agreement will be enforced.

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