On February 16, Miller discovered that the book value on February 2 was only $50 per share. Will Miller be successful in a lawsuit against Phillips? Why or why not?
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On February 2, Phillips induced Miller to purchase from her fifty shares of stock in the XYZ Corporation for $10,000, representing that the actual book value of each share was $200. A certificate for fifty shares was delivered to Miller. On February 16, Miller discovered that the book value on February 2 was only $50 per share. Will Miller be successful in a lawsuit against Phillips? Why or why not? |
Explanation
The evidence to support each argument is as follows:
o Individual M is going to get success in a legal suit because the material facts related to the value of the shares were intentionally misrepresented by Individual P before the sale, which caused material harm to Individual M.
o Individual Mis not going to get success in the legal suit because Individual M entered into the agreement by believing in the representations made by the seller and did not check any legal documents and certificates before and at the time of the sale.
Verified Answer
The followingare thetwo sides of the argument:
o Individual M is going to be able to sue Individual P for selling the shares fraudulentlyby giving false information.
o Individual M is not going to be able to sue Individual P for selling the shares fraudulently because Individual M was careless and intentionally did not read the contract.
