Where a Mistake Is Made in a Contract, and the Contract

question 23

Multiple Choice

Where a mistake is made in a contract, and the contract contemplates some level of risk, then

• A) the court will grant relief to the party adversely affected by the change in accordance with the degree of the effect of the change.
• B) the court will not grant relief to the party adversely affected by the change.
• C) each party is required to act to mitigate its loss.
• D) the court will apply the principles of equity, allocate the risk and apportion the loss.
• E) the change that takes place becomes a legal mistake.

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Definitions:

FOB Shipping Point

A term used in shipping indicating that the buyer assumes responsibility for the goods and shipping costs the moment the goods leave the seller's premises.

Merchandise Inventory

Goods and products that a firm holds with the intent to sell them as part of its business operations; considered a current asset on the balance sheet.

Perpetual Inventory System

A method for accounting inventory that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

MasterCard

A multinational financial services corporation that facilitates electronic funds transfers globally, primarily through its branded credit and debit cards.