Nora Enters into a Contract with Oceanic Transport,Inc

question 48

Multiple Choice

Nora enters into a contract with Oceanic Transport,Inc.,to insure and ship a painting from Paris to New York City for a certain price. But Oceanic 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 Nora for the mistake.
• C)award damages to Oceanic for the mistake.
• D)enforce the contract as is.

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Definitions:

Long Run

A period of time in economics in which all factors of production and costs are variable, allowing all inputs to be adjusted.

Output

The total amount of goods or services produced by a company, industry, or economy within a specified period.

Total Cost

The complete cost of production, including both fixed and variable costs, incurred by a firm in producing and selling a quantity of a good or service.

Variable Cost

Expenses that vary in relation to the amount of products or services a company generates.