Simon put $5,000 worth of stocks and bonds into an asset management account at Fido Investments. One month later, his account statement indicated that he had a balance of $5 million. Simon quickly withdrew this amount from his account and put it into a Swiss bank account. Can Fido rescind its payment of $5 million to Simon on the grounds of mistake?
A) No, because Simon and Fido made a mutual mistake.
B) Yes, because even though Fido was at fault, Simon was well aware of Fido's mistake in crediting the extra amount to his account.
C) No, because Fido should have exercised reasonable care while crediting the amount to Simon's account.
D) Yes, because Fido was a victim of fraud by execution.

Question

Quizplus · Accepted Answer

.The courts are inclined to impose the loss on the mistaken party unless it appears that the other party should have known of the mistake. In such a case, the courts are likely to grant rescission rather than allow one party to take advantage of the other's mistake.

Simon Put $5,000 Worth of Stocks and Bonds into an Asset