Mark Was Shopping for a Used Car in February

question 66

Multiple Choice

Mark was shopping for a used car in February.He went to AutoMegaWorld and test drove a used 2000 Tiger XL.While driving the car,he looked at the climate control center and noticed that the temperature lever was marked "cold" at one end in blue and "hot" in red at the other end.Mark assumed that the "cold" marking meant that the car had air conditioning.Mark wanted to finally have an air-conditioned car.The salesperson did not mention anything about whether this car was air conditioned,but while test-driving the car,Mark commented,"It will be great to have an air-conditioned car." The salesperson heard Mark and knew that the car did not have air conditioning,but said nothing.Mark bought the car.When Mark was showing his new car off to friends,one of them showed him that the car was not air conditioned.In this circumstance:

• A)Mark can avoid the contract on the basis of mutual mistake.
• B)Mark can avoid the contract on the basis of unilateral mistake because the salesperson knew that Mark was mistaken.
• C)Mark can avoid the contract on the basis of fraud by concealment.
• D)Mark can avoid the contract on the basis of fraud in the inducement.
• E)Mark cannot avoid the contract on the basis of his unilateral mistake.

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Definitions:

Compounded Monthly

The process of calculating interest on both the initial principal and the accumulated interest from previous periods, done monthly.

Invest

The act of allocating resources, usually money, with the expectation of generating an income or profit.

Nominal Annual Rate

The annual interest rate quoted by financial institutions, not adjusted for inflation or other factors that affect the real rate of return.

Balloon Payment

A large, one-time payment due at the end of a loan term, after a series of lower regular payments.