Mrs.Sharp,the owner of a restaurant,induced the Morissons to buy the business by a misrepresentation; the invoices made her costs appear less than they actually were,and thus her profits more than they actually were.On these facts,which of the following is false?
A)The court could award the equitable remedy of rescission if the evidence showed she had fraudulently misrepresented the costs.
B)The court could not award the equitable remedy of rescission if evidence showed that Mrs.Sharp really believed the invoices were accurate.
C)The court could not award the equitable remedy of rectification because the argument is not about rectifying an erroneous written version of a previous oral contract.
D)The court could terminate the contract for breach of contract if the accurate statement of costs and profit were essential terms of the contract.
E)The cause of action could be for the tort of deceit,if there was evidence that Mrs.Sharp intended to deceive the Morissons.

Question

Quizplus · Accepted Answer

The court can award rescission even if the misrepresentation was not fraudulent but innocent, as long as it was material to the contract. Therefore, option B is false. Option C is also false because rectification can be sought to correct mistakes in written contracts, even if they were not previously oral. Options A, D, and E are true.

MrsSharp,the Owner of a Restaurant,induced the Morissons to Buy the Business