Flora Enters into a Contract with Global Shipping, Ltd

question 13

Multiple Choice

Flora enters into a contract with Global Shipping, Ltd., to insure and ship a painting from France to the United States for a certain price. Global makes a mistake in adding the costs, which results in a contract price that is $1,000 less than the true cost. Most likely, a court would​

• A) ​allow the parties to rescind the contract.
• B) ​award damages to Flora for the mistake.
• C) ​award damages to Global for the mistake.
• D) ​enforce the contract as is.

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Definitions:

Inferior Good

An inferior good is a type of good whose demand decreases when consumer income rises, unlike normal goods, for which the opposite is observed.

Income

Earnings received by an individual or entity in exchange for labor or investment, typically expressed in monetary terms.

Demand Curve

A pictorial representation that maps out the correlation between a good's price and its demand over an allotted time.

Laws of Supply and Demand

Economic principles stating that the price of a good is directly related to its availability (supply) and the desire for it (demand), with high demand and low supply leading to high prices, and vice versa.