Asked by Jessa Gesta on May 28, 2024
Verified
Morton Reeves,a building subcontractor,submitted a bid for construction of a portion of a high-rise office building.The bid contained material errors in computation.Lago Corp. ,the general contractor,accepted the bid with the knowledge of Reeves' errors.Reeves:
A) must perform the contract unless he can show that Lago acted fraudulently.
B) must perform the contract according to the stated terms since his errors were unilateral.
C) can avoid liability on the contract only if his errors were not due to his negligence.
D) can avoid liability on the contract since Lago knew of his errors.
Material Errors
Significant mistakes or inaccuracies that impact the understanding, operation, or outcome of a document, financial statement, or process.
Construction
The process or art of building something, typically structures like buildings, bridges, and roads.
Fraudulently
Acting with intent to deceive or cheat, often to gain an unfair or unlawful advantage.
- Determine the corrective measures applicable for deception and fraudulence in contractual agreements.
- Achieve comprehension of the fundamental components required to formulate a cause of action for fraud or duress in contractual legalities.
Verified Answer
CB
Christopher BogansMay 31, 2024
Final Answer :
D
Explanation :
This is an example of a unilateral mistake.Courts permit avoidance in cases of unilateral mistake if the nonmistaken party knew of the mistake or if the mistake was so obvious that the nonmistaken party had reason to realize that a mistake had been made.Since Lago had sufficient knowledge of Reeves' mistake but failed to immediately inform him about it,Reeves can avoid liability on the contract.
Learning Objectives
- Determine the corrective measures applicable for deception and fraudulence in contractual agreements.
- Achieve comprehension of the fundamental components required to formulate a cause of action for fraud or duress in contractual legalities.