Diamond Dave Decides to Sell His Donut Franchise to Fast

Multiple Choice

Diamond Dave decides to sell his donut franchise to Fast Freddie.Freddie has a number of questions about the receivables.Diamond Dave says that all of the answers to his questions can be found in the corporate ledger.Instead of inspecting the ledger, Fast Freddie hires an accounting firm to do a forensic audit of the business.Relying on the audit, Freddie buys the business.Which of the following explains why Freddie would fail to obtain rescission if he later decided he did not like the transaction?

A) Freddie affirmed Dave's misrepresentation.
B) Freddie did not rely on the fraudulent misrepresentation that Dave made.
C) Diamond Dave was not careless with his ledger, but by not conducting his own forensic audit Diamond Dave misled Freddie into thinking he needed to conduct a forensic audit; however, this was not the cause of Freddie's damages.
D) Diamond Dave made an innocent misrepresentation, but it is impossible to restore the parties to their previous positions.
E) Diamond Dave did not make any misrepresentation in any way, and Freddie relied entirely upon his own investigations.