Material Misrepresentation In Contract Formation
Bill owns a pawn shop that sells jewelry. He wishes to sell a gold-plated necklace. Before selling the necklace to Rita, Bill replaces the "Gold Plated" tag with an "18k" tag and explicitly tells her that the piece is solid 18-karat gold. Two weeks later, the necklace breaks. When Rita takes it to a jeweler for repairs, she discovers that the necklace is merely gold-plated. Rita subsequently sues Bill for fraud.
Which of the following constitutes the material misrepresentation in the formation of this contract?
ABill altered the necklace before selling it.
BThe necklace broke shortly after Rita purchased it.
CThere was no fraud in the formation of the contract.
DBill knew the necklace was gold-plated but told Rita it was solid 18-karat gold.
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