In selling a 600-acre farm to Family Farms, Inc., Jake tells the buyer that the land "will be worth twice as much by next year." This statement is not likely to support rescission of the contract because it is

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BlackTom AI · Accepted Answer

The question presents a statement made during a real estate transaction and asks which characterization would not likely support rescission.
Option 1: 'a misrepresentation.' A misrepresentation involves a false statement of fact that induces reliance. Here, saying the land 'will be worth twice as much by next year' is a prediction or forecast rather than a stated fact about the current condition or quality of the land. While it could be incorrect, it is not necessarily a false statement of fact at the time it is made; it is a projection or expectation rather than a factual assertion about the land's present state. Therefore, this option does not best describe the statement's nature as likely supporting rescission.
Option 2: 'an opinion.' This is the key distinction. Many courts treat opinions or puffery about future value as not actionable for rescission because opinions reflect the speaker’s judgment or belief rather than a specific misrepresentation of fact. A potential buyer should be aware that opinions are not facts the other party is guaranteeing, so such a statement is more likely to be considered non-actionable puffery or a forecast rather than a misrepresentation of a material fact.
Option 3: 'a material fact.' A material fact is a fact that a reasonable person would consider important in deciding whether to enter into the contract. If the statement were presented as an objective certainty about future value and it were false, it could support rescission. However, the statement here is framed as a prediction rather than a guaranteed fact, which makes this option a less accurate categorization.
Option 4: 'a mistake.' A mistake refers to an erroneous belief held by one or both parties about a fact at the time of contract formation. The given statement is not presented as a mistaken belief about the land’s condition but as a forecast about future value, so misinterpretation as a mutual or unilateral mistake is unlikely.
Overall, the statement is best described as an opinion or forecast about future value, rather than a misrepresentation of fact, a material fact presented as fact, or a mistake. The distinction hinges on whether the assertion is presented as a verifiable fact about the present or past, rather than as a forward-looking judgment, which is typically not grounds for rescission on its own.

ACCT:4300:0001 Fall25 Examination #1 - Accounting Ethics and Law- Requires Respondus LockDown Browser

In selling a 600-acre farm to Family Farms, Inc., Jake tells the buyer that the land "will be worth twice as much by next year." This statement is not likely to support rescission of the contract because it is

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