Purchaser's Failure to Exercise Due Diligence Bars Rescission for Misrepresentation in Share Sale

A purchaser of shares in a company, who had agreed to the sale price but later discovered an overvaluation based on inaccurate financial statements provided by the seller, sued for rescission of the sale, claiming fraudulent misrepresentation. The court rejected the appeal, reasoning that while the seller's representations regarding the company's financial situation were false, the purchaser's claim for rescission based on error or fraud was inadmissible because the purchaser, acting as a prudent investor informed of the general economic situation and the need for diligence, failed to exercise due diligence to verify the actual financial standing of the company prior to finalizing the agreement.