Intoxicated, Hank Enters a Contract for the Sale of Ten

question 4

Multiple Choice

Intoxicated, Hank enters a contract for the sale of ten acres of timberland to Ira for less than its market value. Later, Hank seeks to cancel the deal. In determining whether Hank can avoid his duties under the contract, a court is most likely to look at

• A) only Hank's intoxicated mental state.
• B) only factors other than the Hank's intoxicated mental state.
• C) Hank's intoxicated mental state and other factors.
• D) none of the choices.

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Definitions:

Market Price

The existing price point for transactions involving an asset or service in the market.

Perfectly Competitive

A market structure characterized by a large number of small firms, a homogeneous product, and free entry and exit, leading to price taking behavior.

Marginal Revenue

The increase in revenue that results from selling one more unit of a product.

Profit-Maximizing Output

The level of production at which a firm achieves the highest possible profit, calculated by equating marginal revenue and marginal cost.