What Are the Two Types of Contingency Reserves and How

question 64

Essay

What are the two types of contingency reserves and how are they handled?

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Definitions:

Voidable

A term referring to a legal agreement or transaction that is valid but may be annulled by one of the parties involved.

Mutual Mistake

A situation in a contract where all parties have a shared misunderstanding regarding a fundamental fact or factor in the agreement.

Fraudulent Misrepresentation

A false statement made knowingly or recklessly with the intent to deceive, leading another to enter into an agreement or suffer a loss.

Material Fact

A fact that is significant or essential to the matter at hand, and could influence the outcome of a legal decision if known.