Multistate Bar Examination Practice Question

The only correct statement is that a false but material assertion can render a contract voidable even when made innocently. Under Restatement (Second) of Contracts § 164, a party induced by either a fraudulent or material misrepresentation may avoid the contract if reliance was justified. Fraudulent misrepresentation requires intent to deceive (Restatement § 162), but negligent and innocent misrepresentations may still be "material" and thus actionable, granting at least rescission, and sometimes damages, without proof of intent. The other options incorrectly claim that intent is always required, that negligent misrepresentation demands proof of economic duress, or that innocent misrepresentation affords no remedy.