Jeff Was a Subcontractor,bidding on a Contract for ACE Corp

question 29

Multiple Choice

Jeff was a subcontractor,bidding on a contract for ACE Corp.,the general contractor.When adding up the total of materials and labor,Jeff's secretary mistakenly moved the decimal point one place,ending up with a bid of $3500 rather than $35,000.ACE Corp.accepted Jeff's bid,mostly because all the other bids were over $30,000.When Jeff learned of the mistake,he tells ACE Corp.that he cannot do the job for $3500.If ACE Corp.sues to enforce this contract,what is the most likely result?

• A)The contract is enforceable, since there was an offer, acceptance, and consideration.
• B)This is a bilateral mistake, so the contract can be rescinded by either party.
• C)This is a unilateral mistake, so the contract cannot be rescinded by Jeff.
• D)This is a unilateral mistake, but one where ACE Corp. knew that a mistake had been made. Jeff should be able to rescind the contract.

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Definitions:

Prepaid Expenses

Payments made for goods or services to be received in the future, recorded as assets until they are fully utilized or consumed.

Preferred Stock Dividends

Payments made to holders of preferred stock, typically fixed and paid out before dividends to common stockholders.

Financing Activities

Transactions related to raising funds or capital for a company, including issuing debt and equity.

Investing Activities

Deals related to buying and selling long-term assets and different investments, excluding cash equivalents.