A, with the intention to mislead B, falsely claims that his factory produces five hundred munds of indigo annually, which induces B to purchase the factory. What is the legal status of the contract?

Show Answers

The agreement can be rescinded by AB has the right to void the contractBoth A and B can annul the contractThe contract remains valid and bindingThe contract is automatically null

Explanation

Since A intentionally deceived B by making a false statement to induce the contract, the agreement is voidable at B's option. Therefore, B can choose to rescind the contract due to fraudulent misrepresentation.