Asked by Nomvula Mahlangu on Sep 30, 2024
Joe sells his business to Shirley.During the negotiations,Joe negligently tells Shirley that the business has earned a profit for the last five years.In reality,the business operated at a loss for each of those years.However,Shirley did not hear Joe's misstatement.Shirley cannot rescind the contract because:
A) Joe's false statement was negligent rather than intentional.
B) Joe's misstatement was not material.
C) Shirley did not actually rely on Joe's misstatement.
D) an untrue assertion of fact was made.
Negligently
Acting with a lack of care or attention to duty that results in harm or damage.
Rescind
To rescind means to revoke, cancel, or annul a contract, agreement, or resolution, effectively making it as though it never existed.
Rely
Depend on or trust in something or someone for support or maintenance.
- Acquire knowledge on the mechanisms and situations enabling rescission of a contract.
- Explain the distinction between unilateral and mutual errors and their effects on the legitimacy of a contract.
Learning Objectives
- Acquire knowledge on the mechanisms and situations enabling rescission of a contract.
- Explain the distinction between unilateral and mutual errors and their effects on the legitimacy of a contract.