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 o

Answer 1

Answer: Fraud

Explanation: Contracts are legally binding and thus cannot be rescinded (cancelled) easily. The only way a contract may be rescinded is if evidence exists that undue influence (forcing someone into the contract) or fraud took place. In terms of fraud if a person is induced into a contract by material misrepresentation, then the person who was induced into the contract may rescind the contract.

Beth was induced into the contract by Alan. Because Alan knowingly misrepresented material features about the business to Beth, this is a form of fraud on Alan's part. Beth is thus allowed to rescind the contract.