If Someone Buys a Piece of Artwork That Neither the Buyer

question 140

Essay

If someone buys a piece of artwork that neither the buyer nor seller knows is a masterpiece,this is considered a mutual mistake of value.Can the seller rescind such a contract? If,however,a buyer and seller think the piece of artwork being sold is a particular masterpiece,but in fact it is not,this is considered a mutual mistake of fact.Can the buyer in this case rescind the contract? Why is the result different in these two situations? What is different about the two situations that would suggest that they have different outcomes?

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Definitions:

Cost of Capital

The required return necessary to make a capital budgeting project, such as building a new factory, worthwhile.

Division A

A segment or branch of a company that operates independently with its own set of management and objectives but is still legally tied to the parent corporation.

Division B

Generally refers to a specific unit or section within a larger organization, allocated for managing a particular set of tasks or responsibilities.

CAPM

The Capital Asset Pricing Model (CAPM) is a financial model that describes the relationship between systematic risk and expected return for assets, particularly stocks.