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1. When Linda divorced Doug, they agreed to split their assets equally. Titled in their names jointly was, among other things, a securities account with

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1. When Linda divorced Doug, they agreed to split their assets equally. Titled in their names jointly was, among other things, a securities account with Bernard L. Madoff Investment Securities. The most recent quarterly account statement prior to the divorce decree being issued specified a market value of the securities that Madoff purchased on behalf of Doug and Linda of $5.4 million. Doug and Linda agreed that Doug would keep the Madoff account and that Doug would pay Linda $2.7 million in cash to reflect her equal share of the account. All other assets were divided equally between Doug and Linda. Later, after the divorce and the payment by Doug to Linda of the $2.7 million, Doug first learned that Madoff had never purchased any securities at all, because Bernie Madoff was responsible for the largest Ponzi scheme in the history of the world. (Check out Wikipedia to understand what Madoff actually did and what constitutes a Ponzi scheme.) Case Study Can Doug rescind his agreement with Linda, and get his $2.7 million back from Linda, because of mutual mistake? Explain fully. A correct answer to this question requires students to read the problem carefully; to understand the definition of the word "account;" and to determine correctly whether Doug and Linda's mistake was a mistake of fact or a mistake of value

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