Question

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:

Answer 1

Answer:

"Shirley did not actually rely on Joe's misstatement" is the correct answer.

Explanation:

• Reliance means that the individual adopts a way to proceed due to various his/her confidence in a statement that she has established.
• For lack of understanding to occur, a causal relationship may well have been formed between some of the claims as well as the determination of the authority concerned to implement the arrangement.
• Because Shirley wasn't really conscious that someone had presented an argument, there would be no dependency. Therefore, she can't extrapolate a rescission upon this.