Mathieson Wanted to Lease a Suite in the New Office

question 69

Multiple Choice

Mathieson wanted to lease a suite in the new office building owned by Logan,which is the most prestigious in town.He knew that Logan would not rent to him because of a business deal several years ago that had gone bad,costing Logan a great deal of money.Logan swore he would never do business with Mathieson again.Mathieson paid Muir to act as an agent for his company,and Logan rented to him.Several months later,Logan found out who had really rented the suite.

• A)This is a unilateral mistake that would entitle Logan to declare the lease contract to be at an end.
• B)This is a mutual mistake that would entitle either party to declare the contract to be at an end.
• C)This is a unilateral mistake but Logan cannot end the contract because the identity of the other party is not a material term of the contract.
• D)Since the contract has been in existence without problems for several months,Logan cannot now withdraw his agreement to the contract as Mathieson has relied on it.
• E)A contract based on a lie is void.

---

Definitions:

Weighted Average Cost of Capital

A calculation of a firm's cost of capital in which each category of capital (debt, equity, etc.) is proportionately weighted, reflecting the cost of financing new projects based on the company's existing capital structure.

Deferred Payment Incentive

A compensation structure where part of an individual's or entity's payment is postponed to a future date, often used as an incentive or reward.

Short-term Profit

Profits earned over a short period of time, typically a quarter or a year, reflecting the immediate financial health of a company.

Long-term Profits

Profits generated over an extended period, indicating the sustainability and viability of a company's business model.