Final answer:
When fraud is present in a contract, the innocent party has the choice to void the contract. In this scenario, John, being the party deceived by George's fraudulent claims, would be entitled to void the contract or affirm it and seek damages.
Step-by-step explanation:
If John enters into a contract with George and discovers that George has committed fraud in his claims in the contract, the correct answer is that the contract may be voidable at the choice of the innocent party, which is John. This means that option 3) John or George may void the contract is the most accurate among the given choices. When fraud is discovered by the non-breaching party, they typically have the option to rescind the contract and seek damages or, in some cases, choose to affirm the contract and sue for damages caused by the fraud. However, it is up to the party who was harmed by the fraud (John in this case) to decide whether to treat the contract as void. George, having committed the fraud, does not have the right to rescind the contract on this basis.