An Agreement Is Not Binding When

question 33

Multiple Choice

An agreement is not binding when:

• A) one party makes a mistake regarding a material fact.
• B) both parties make a mistake regarding a material fact.
• C) one party makes a mistake of law.
• D) all of the above.

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Definitions:

Capital

Financial assets or resources that businesses or individuals use to fund operations, investments, and growth.

Ordinary Business Income

Income earned from the normal business operations, subject to regular tax rates.

Subchapter S

A section of the Internal Revenue Code that allows corporations to pass income directly to shareholders and avoid double taxation while retaining the benefits of corporate structure.

Schedule K-1

A tax form used to report a beneficiary's share of income, deductions, and credits from a partnership, S corporation, or trust.