Asked by Kericia Halliday on May 30, 2024
Verified
On May 6,Robbie entered into a signed contract with Ed,whereby Robbie agreed to sell Ed a painting with a fair market value of $350,000 for $130,000.Robbie believed the painting was worth only $130,000.Unknown to either party,the painting was destroyed by fire on May 4.If Ed sues Robbie for breach of contract,Robbie's best defense is:
A) risk of loss had passed to Ed.
B) lack of adequate consideration.
C) mutual mistake.
D) unconscionability.
Mutual Mistake
A situation where both parties to a contract have an incorrect belief about an essential fact of the contract at the time of agreement.
Unconscionability
Describes a contract or term within a contract deemed so unfair or oppressive to one party that no reasonable or informed person would agree to it.
Risk of Loss
The responsibility for damage or financial burden that may arise from the destruction, damage, or loss of goods.
- Gain insight into the necessary conditions and contexts in which a contract may be nullified due to misrepresentation.
Verified Answer
JK
Jagjiwan KarwalMay 31, 2024
Final Answer :
C
Explanation :
This is a case of mutual mistake where both parties can rescind the contract as neither of them verified for the actual existence of the painting before signing the contract.
Learning Objectives
- Gain insight into the necessary conditions and contexts in which a contract may be nullified due to misrepresentation.