Ezra is an agent for Fresh Food Corporation. Ezra makes an innocent mis?representation when entering into a contract on be?half of Fresh with Gala Grocery Stores, Inc. Gala
A) is estopped from performing the contract.
B) may rescind the contract.
C) must perform the contract.
D) must ratify the contract.

Question

Quizplus · Accepted Answer

Gala Grocery Stores, Inc. may rescind the contract due to the innocent misrepresentation made by Ezra on behalf of Fresh Food Corporation. Innocent misrepresentation occurs when the misrepresentation was made without knowledge of its falsity and without any intention to deceive. Gala Grocery Stores, Inc. may choose to rescind the contract because they acted on the false information provided by Ezra. Gala Grocery Stores, Inc. cannot be estopped from performing the contract because they were not aware that the information was false. Fresh Food Corporation does not need to ratify the contract because it was entered into by Ezra on behalf of the company.

Ezra Is an Agent for Fresh Food Corporation