Where Parties to a Contract Have a Pre-Existing Relationship and One

question 10

Multiple Choice

Where parties to a contract have a pre-existing relationship and one party has a degree of influence or dominance over the other and the stronger party takes advantage of that influence so that the weaker party does not exercise their independent judgement, the contract will be voidable by the weaker party because of:

• A)unilateral mistake.
• B)common mistake.
• C)duress.
• D)undue influence.

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Definitions:

Risk-Free Bond

A debt security that is assumed to have no risk of default, typically issued by a government with a stable financial outlook, allowing investors to predict with a high degree of confidence their return on investment.

Maturity Date

The date on which a financial obligation or investment becomes due for payment.

American Calls

Options contracts that allow the buyer to exercise the option to buy the underlying asset at the strike price at any time before expiration.