2. On April 1, Sontos, a dealer in mining stocks, sold to Burns, 10,000 shares o

Question

2. On April 1, Sontos, a dealer in mining stocks, sold to Burns, 10,000 shares of Alaska Uranium, Inc., at $5 per share, knowingly misrepresenting that Alaska Uranium, Inc. had proven uranium deposits in its Alaska properties. Burns paid Santos for the stock on April1.

On April 15, on the advice of friends, Burns had the corporation investigated and found that it had never had any prospects of uranium, but that it had just discovered to copper vein on its property and was putting it into production. During the following February, Burns receivd and deposited a $100 check from Alaska Uranium Inc. for its one cent per share dividend. One month later, Burns regretted his purchase.

a) In an action by Burns against Santos to disaffrim the contract on the grounds of fraud, judgment for whom? Explain.

b) In an action by Burns against Alaska Uranium Inc. to recover damages based on fraud, judgement for whom? Explain.

c)In an action by Burns against Alaska Uranium, Inc. to recover damages based on fraud, judgement for whom? Explain

Explanation / Answer

Ans 1.The BUrns in action to the disaffirm the contract on basis of farud and

A contract may be voidable on teh grounds of Fraud, Mistake , misinterpretation , and so on. A contract taht is based on one of tehse grounds is not automatically void but is voidable at the option of the party entitled to avoid it.

For example, a person who has induced by fraud to enter into a contract may disclaim teh contract by his or her conduct or by an express affirmation after,acquiring full knowldge of teh facts. LIke wise, acontract between a minor and another party is generally viewed as voidable by the minor. The minor may legally decide to ratify the contract or disaffirm teh contract.

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