Case 13.5 Innocent Misrepresentation Case 20.1 Cure on (1).docx

Case 13.5 Innocent Misrepresentation Case 20.1 Cure on (1).docx

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Taneka Sleeger DeVry University Business Law 420 13.5 Innocent Misrepresentation W. F. Yost, who owned the Red Barn Barbecue Restaurant (Red Barn), listed it for sale. Richard and Evelyn Ramano of Rieve Enterprises, Inc. (Rieve), were interested in buying the restaurant. After visiting and conducting a visual inspection of the premises, Rieve entered into a contract to purchase the assets and equipment of Red Barn, as well as the five-year lease of, and option to buy, the land and the building. Prior to the sale, the restaurant had been cited for certain health violations that Yost had corrected. In the contract of sale, Yost warranted that “the premises will pass all inspections” to conduct the business.b Rieve took possession immediately after the sale and operated the restaurant. After two weeks, when the Board of Health conducted a routine inspection, it cited 52 health code violations and thereupon closed the restaurant. Rieve sued to rescind the purchase agreement. Evidence established that Yost’s misrepresentations were innocently made. Can Rieve rescind the contract? Yost v. Rieve Enterprises, Inc. , 461 So.2d 178, Web 1984 Fla. App. Lexis 16490 (Court of Appeals of Florida)b
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We need to figure out if we have a case of innocent Misrepresentation if so can the restaurant owner be sued to rescind the purchase agreement. The owner W.R. Yost wanted to list his restaurant Red Barn Barbecue for sale. Rieve Enterprises, Inc was interested in buying the restaurant. Rieve conducted a visual inspection of the premises and enter into a contract to purchase the assets, the equipment of Red Barn, as well as the five year lease of, and option to buy, the land and building. Prior to the sale, the restaurant had been cited for certain health violations. Yost the owner corrected the violations and in the contract of sale warranted that “the premises will pass all inspections” to conduct the business. Immediately after the sale the Rieve operated the restaurant. 2 weeks of operating the restaurant they got a visit from the Board of the Health. The board did a rountine inspection and the restaurant was cited 52 health code violations and thereupon closed the restaurant. So Now Rieve Enterprisies wants to sue but can they and will they win. From what I have read I think there is an Innocent Misrepresentation and I don’t think they should be able to sue for rescind of the purchase agreement. According to the law. Even if they have made errors this contract can rescinded and become null and void all because Mr. Yost lie to sell business. If you actually read the case in full Rieve have made some errors on their part and there is also a breach of contract on Rieve part. Let’s break the case down on both parties.
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