When Two Parties Are Involved in a Mutual Mistake (Misunderstanding)

question 20

Multiple Choice

When two parties are involved in a mutual mistake (misunderstanding) as to the meaning of a term of the contract, which of the following is usually applied by the court to settle the matter?

• A) The court will find that there is no contract because there is no meeting of the minds.
• B) Non est factum
• C) Caveat emptor
• D) The reasonable person test
• E) The equitable remedy of rectification

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Definitions:

Cash Flow

The total amount of money being transferred into and out of a business, especially as affecting liquidity.

Financing Activities

Transactions and events that affect the equity and long-term liabilities of a company, reflecting how it raises funds and repays its investors.

Operating Activities

Activities that relate to the primary operations of a company, such as selling products or services and administrative expenses.

Taxes

Compulsory charges imposed by governments on individuals or entities to fund public services and infrastructure.