Leilani Purchased a Business from Troy

Multiple Choice

Leilani purchased a business from Troy.She is now interested in the possibility of taking legal action on the basis of an alleged misrepresentation that occurred during the negotiations leading up to the contract.Which of the following statements is TRUE?

A) The contract can be rescinded only if Troy made a fraudulent misrepresentation.
B) If Troy made a negligent misrepresentation, and if Troy owed a duty of care to Leilani in making that representation, Leilani may choose to sue in tort rather than rescind the contract.
C) Because the courts will not punish a person who did not breach an obligation, rescission is not available if Troy merely made an innocent misrepresentation
D) Because the purpose of rescission is to reverse the effects of a transaction, Leilani will not be able to receive court costs if she rescinds the agreement
E) Leilani cannot obtain rescission because she can only sue in tort.