Ralph Sold a Motel to Steve by Stating That He

question 4

Multiple Choice

Ralph sold a motel to Steve by stating that he had paid $250,000 for it and that his net average annual profit from the business has been $40,000.In reality he paid $100,000 for the motel and has earned a net average annual profit of only $30,000.Steve made no attempt to verify the statements until after the transaction was completed.In this case:

• A)Ralph has committed fraudulent misrepresentation.
• B)Steve is bound by the contract, because he failed to verify the statements which were made to him.
• C)the contract is voidable at Steve's option.
• D)Two of the above, (a) and (c).

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Definitions:

Values

Fundamental beliefs or principles that guide individuals' behaviors and decision-making, reflecting what is important in their lives.

Norms

Established standards of behavior or guidelines that are considered normal within a group or society.

Right and Wrong

Fundamental concepts in morality and ethics concerning what is acceptable behavior and what is not.

World Trade Center

A complex of buildings in Lower Manhattan, New York City, known for the September 11, 2001, terrorist attacks and as a symbol of international trade and commerce.