Which One of the Following Mistakes Voids a Contract

question 52

Multiple Choice

Which one of the following mistakes voids a contract?

• A) Two parties contract for a shipload of coal, but unknown to both parties, at the time of the contract the ship had sunk and the coal had been lost.
• B) Sally and Wacky had a serious misunderstanding about a term in the contract; the court found that the more reasonable interpretation was Sally's.
• C) Two parties contracted for the sale and purchase of a painting for the price of $800. When the contract was written up, the price was incorrectly stated as $900.
• D) Sam bought three gallons of paint, but found he had made a mistake; two would have been sufficient.
• E) When Mr. and Mrs. Houston put their property up for sale, Sam without speaking to the Houstons or their agent about the land, offered close to the asking price because he thought it was suitable for growing wheat. After his offer was accepted, he learned it was not suitable for wheat.

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Definitions:

Cash Disbursement

The payment of money from a fund or account, typically involving the transfer of cash to individuals or companies for services rendered or goods purchased.

Operating Cycle

The period from purchasing inventory to collecting cash from the sale of that inventory.

Accounts Receivable Financing

A type of financing arrangement in which a company uses its receivables as collateral for a loan, effectively selling its right to future payments in exchange for immediate cash.

Factored Receivables Financing

A financial transaction in which a business sells its accounts receivable to a third party at a discount in exchange for immediate cash.