Mona Is Induced by Her Guardian Newt to Sign a Contract

question 63

Multiple Choice

Mona is induced by her guardian Newt to sign a contract to invest her student loan funds in Overseas Bank through Newt's investment firm.Unknown to Mona,Newt realizes ongoing commissions from the investment.Most likely,Mona may

• A)not rescind the contract.
• B)rescind the contract on the basis of undue influence.
• C)rescind the contract on the basis of mistake.
• D)rescind the contract on the basis of fraud.

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Definitions:

Rationality

The quality of being based on or in accordance with reason or logic, often involving the making of decisions using cost-benefit analysis.

Self-Interest

The pursuit of personal advantage and well-being, often considered the motivating factor behind economic activities.

Utility

The satisfaction or benefit derived by consumers from consuming goods and services.

Opportunity Cost

The potential benefit that is missed out on when choosing one alternative over another.