If the Seller of a Product Makes a Misrepresentation of Law

question 76

Multiple Choice

If the seller of a product makes a misrepresentation of law that the buyer relies upon,can the buyer rescind the contract?

• A) Yes; this is considered to be fraud by concealment.
• B) Yes; this is considered to be fraud in the inducement.
• C) Yes; this is considered to be fraud in the inception.
• D) No; each party to the contract is assumed to know the law that applies.
• E) Not unless the buyer contacted his attorney.

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Definitions:

Capital Acquisitions Ratio

A financial metric that compares total acquisitions of property, plant, and equipment with cash flow from operating activities, indicating the extent to which operating cash flows are used to finance capital expenditures.

Operating Activities

The principal revenue-producing activities of an entity and other activities that are not investing or financing activities.

Comparative Balance Sheets

Comparative balance sheets present the financial position of a business at different points in time, allowing for analysis of trends and changes.

Investing Activities

Transactions involving the acquisition or disposal of long-term assets and other investments not included in cash equivalents.