Joe sells his business to Shirley. During the negotiations, Joe negligently tells Shirley that the business has earned a profit for the last five years. In reality, the business operated at a loss for each of those years. However, Shirley did not hear Joe's misstatement. Shirley cannot rescind the contract because:

"Shirley did not actually rely on Joe's misstatement" is the correct answer.

Explanation:

Reliance means that the individual adopts a way to proceed due to various his/her confidence in a statement that she has established. For lack of understanding to occur, a causal relationship may well have been formed between some of the claims as well as the determination of the authority concerned to implement the arrangement. Because Shirley wasn't really conscious that someone had presented an argument, there would be no dependency. Therefore, she can't extrapolate a rescission upon this.