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Question
Sargent put $5,000 worth of stocks and bonds into an asset management account at Fido Investments. One month later, his account statement indicated that he had a balance in his account of $5 million. Sargent quickly withdrew this amount from his account and put it into a Swiss bank account. Can Fido rescind its payment of $5 million to Sargent on the grounds of mistake?
A. No, because Sargent had given value consideration.
B. Yes, because even though Fido was at fault, Sargent was well aware of Fido's mistake in crediting the extra amount to his account.
C. No, because Fido should have exercised reasonable care while crediting the amount to Sargent's account.
D. Yes, because Fido stands to suffer huge material loss without the rescission.
Answer
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