Opinion ID: 1246023
Heading Depth: 1
Heading Rank: 3

Heading: Reasonable inquiry.

Text: Couturier next argues that the trial court should have denied rescission because Holmes failed to exercise reasonable inquiry into the condition of the property. Couturier confuses rescission based upon mistake of fact with rescission based upon fraud. While a party seeking rescission based upon mistake of fact must have exercised reasonable diligence, the same is not true for a party seeking rescission based upon fraud. [N]egligence in trusting a representation will not excuse a positive wilful fraud[.] Omaha Nat'l Bk. v. Manufacturers Life Ins. Co., 213 Neb. 873, 882, 332 N.W.2d 196, 202 (1983); see also Estate of Jones by Blume v. Kvamme, 430 N.W.2d 188, 193 (Minn.Ct.App.1988), aff'd in part, rev'd in part, 449 N.W.2d 428 (Minn.1989) (A person is justified in relying upon a false representation, although he might have ascertained its falsity had he made an investigation.); Cedar Falls Bldg. Center, Inc. v. Vietor, 365 N.W.2d 635, 639 (Iowa Ct.App.1985) (When an individual acts on the representations of another and relies on them in good faith, he has no duty to further investigate[.]). As long as Holmes relied upon the fraudulent representation of Couturier, the reasonableness of his inquiry is irrelevant.