Which One of the Following Mistakes Voids a Contract

question 175

Multiple Choice

Which one of the following mistakes voids a contract?

• A)Two parties contracted 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)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.
• C)Sally and Mary had a serious misunderstanding about a term in the contract; the court found that the more reasonable interpretation was that of Sally.
• D)When Mr.and Mrs.Houston put their property up for sale,Sam,without speaking to the Houstons or to 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.
• E)Sam bought three gallons of paint,but found he had made a mistake; two would have been sufficient.

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Definitions:

Cost of Goods Manufactured

The cost of goods manufactured is the total production cost of goods completed during a specific period, including materials, labor, and overhead expenses.

Product Cost

The total expense incurred in the manufacturing of a product, including the costs of raw materials, labor, and overhead.

Period Cost

Costs that are not directly tied to the production of goods and are expensed in the period they are incurred.

Financial Accounting

The practice of recording, summarizing, and reporting the myriad of transactions resulting from business operations over a period of time.