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Ralph received an inheritance of $30,000 from his aunt’s estate. He then bought a used sports car from Sid and paid $25,000 cash. Shortly thereafter, Ralph realized that Sid had fraudulently misstated the car’s mileage, horsepower, and engine condition. At the same time, Ralph realized he needed $15,000 in cash to close a real estate deal. As a consequence, he took out a loan using the sports car as collateral. a) Could Ralph still avoid and rescind the contract for the purchase of the car? b) Could he take any other legal action against Sid?

Answer :

Anthougogo

a) Ralph could void and rescind the contract with Sid the car because of fraud.

He had already paid Sid the sum of $25,000 for the car, whose mileage, horsepower, and engine condition were fraudulently misstated.

b) Ralph could take legal action against Sid to recover value for the fraudulent misstatements.

Thus, Ralph should immediately sue Sid to void the contract or recover damages.

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