David Entered into a Contract to Sell Ruth a Parcel

question 38

Multiple Choice

David entered into a contract to sell Ruth a parcel of land fully aware that Ruth's intention of purchase was to construct a high-rise commercial building.David was also aware that the subsurface soil condition of the property would prevent such construction.The soil condition was not readily discoverable in the course of normal inspections or soil evaluations.David did not disclose the existence of the condition to Ruth,nor did Ruth make any inquiry of David as to the suitability of the land for the intended development.David's silence as to the soil condition:

• A) renders the contract voidable at Ruth's discretion.
• B) entitles Ruth only to monetary damages.
• C) makes the contract a case of a mutual mistake.
• D) does not affect the validity of the contract.

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Definitions:

Cash Flowing

The movement of money in and out of a business, representing its operational liquidity.

Expenses

Costs incurred during the operation of a business that are necessary for generating revenue, such as rent, salaries, utilities, and materials.

Residual Value

The estimated value of a fixed asset at the end of its useful life.

Useful Life

The estimated lifespan of a depreciable asset during which it can be expected to contribute to company operations.