A, with intent to mislead B, falsely claims that A’s factory produces five hundred munds of indigo annually, thereby persuading B to purchase the factory. What is the legal status of the contract?

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The agreement can be rescinded by AThe agreement can be rescinded by BThe agreement can be rescinded by both A and BNone of the aboveNot applicable

Explanation

Since A deliberately deceived B by making a false representation, the contract is voidable at the option of B, the party misled. Therefore, B has the right to rescind the contract.