Alan induces Beth to enter into a contract for the purchase of a Chef's Burger House restaurant. Alan knowingly misrepresents a number of material features about the restaurant and the business. When Beth discovers the truth, she can rescind the contract on the basis of
A) fraud.
B) undue influence.
C) mistake.
D) none of the choices.

Question

Alan induces Beth to enter into a contract for the purchase of a Chef's Burger House restaurant. Alan knowingly misrepresents a number of material features about the restaurant and the business. When Beth discovers the truth, she can rescind the contract on the basis of
A) ​fraud.
B) ​undue influence.
C) ​mistake.
D) ​none of the choices.

Quizplus · Accepted Answer

Alan has knowingly made misrepresentations which are material to the contract, hence Beth can rescind the contract based on fraud. Fraud occurs when somebody intentionally misrepresents important facts to induce somebody else to enter into a contract. In this case, Alan's misrepresentations induced Beth to enter into the contract, hence she can rescind the contract.

Alan Induces Beth to Enter into a Contract for the Purchase