A Agrees to Buy 1000 Shares in a Telephone Company

question 93

Multiple Choice

A agrees to buy 1000 shares in a telephone company from B for $3.00 a share.A believes that the value of the shares in the company is going to go up to $15.00 in a day or two.However,B believes that the value of the shares is going to go down to $1.50 and wants to get as much money as he can.Unknown to either A or B,at the time of the agreement,the value of the company and thus the shares has dropped below $1.50,to $0.75.A now wishes to get out of the agreement.In this case,

• A)A will succeed because A was mistaken about the value of the shares in the company and has been adversely affected.
• B)A will succeed because there was a mistake as to the subject matter of the contract and A has been adversely affected.
• C)A will not succeed because A was adversely affected and took a risk about the company and the value of its shares.
• D)A will succeed because a change in circumstances of the company does not affect the agreement.
• E)A will not succeed because both A and B took a risk about the value of the shares in the company.

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