Which of the Following Is True About Unilateral Mistakes

question 5

Multiple Choice

Which of the following is true about unilateral mistakes?

• A) The court does not grant rescission even if the mistaken party is slightly negligent.
• B) The court will grant relief even if the person's own negligence is the cause of his or her mistake.
• C) The plaintiff needs to promptly notify the defendant when a mistake is discovered.
• D) The basic rule is that it is grounds for rescission only if both parties to the agreement are acting under a mistaken belief.

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Definitions:

Retained Earnings

The portion of net earnings not distributed as dividends but retained by the company to reinvest in its core business or to pay debt.

Stock Dividends

Dividends paid to shareholders in the form of additional shares of stock instead of cash.

Contributed Capital

The total value of the cash and other assets received by a company from its shareholders in exchange for stock, also known as paid-in capital.

Preferred Stock

A class of ownership in a corporation with a higher claim on assets and earnings than common stock, often paying fixed dividends.