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Miller negotiated the sale of Miller's liquor store to Jackson. Jackson asked to see the prior year's financial statements. Using the store's check book Miller
Miller negotiated the sale of Miller's liquor store to Jackson. Jackson asked to see the prior year's financial statements. Using the store's check book Miller prepared a balance sheet and profit and loss statement as well as he could. Miller told Jackson to have an accountant examine Miller's records because Miller was not an accountant. Jackson failed to do so and purchased the store in reliance on Miller's financial statements. Jackson later learned that the financial statements included several errors that resulted in a material overstatement of assets and net income. Miller was not aware that the errors existed. Jackson sued Miller, claiming Miller misrepresented the store's financial condition and that Jackson relied on the financial statements in making the decision to acquire the store. Which of the following statements is correct?
a
Jackson will prevail if the errors in the financial statements were material.
b
Jackson will not prevail because Jackson's reliance on the financial statements was not reasonable.
c
Money damages is the only remedy available to Jackson if in fact, Miller has committed a misrepresentation.
d
Jackson would be entitled to rescind the purchase even of the errors in the financial statements were not material.
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