ContractsIntermediateAlaska Exam

An Alaska real estate contract that was fraudulently induced is:

AVoid from the beginning
BVoidable at the option of the defrauded partyCorrect
CValid and binding on both parties
DOnly voidable if the fraud was material, in general

Why Voidable at the option of the defrauded party Is Correct

Answer B: Voidable at the option of the defrauded party

A contract induced by fraud (a knowing misrepresentation of a material fact) is voidable at the option of the defrauded party. The innocent party may choose to affirm the contract (and sue for damages) or rescind it (returning both parties to their prior positions).

Exam Tip: Contracts

Contract questions frequently test the essential elements required for a valid contract. Remember: competent parties, mutual consent, lawful object, and sufficient consideration. Watch for void vs. voidable distinctions.

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