Asked by Zertashia Afzal on May 22, 2024
Verified
Which of the following statements about mutual mistake of a basic assumption is true?
A) The parties must be consciously aware of the assumption.
B) An assumption is basic even when it concerns a matter that bears an indirect or collateral relationship to the subject matter of the contract.
C) Assumptions about the identity,existence,quality,or quantity of the subject matter of the contract are considered to be basic assumptions.
D) A contract can be avoided even if the mutual mistake was not based on a basic assumption.
Mutual Mistake
A misunderstanding among all parties involved in a contract, making the contract potentially voidable.
Basic Assumption
An underlying assumption that is accepted as true without proof as the basis for argument or action.
Avoided Contract
A contract that has been declared null and void, often due to legal deficiencies or mutual agreement.
- Understand the legal reasons that permit the dissolution of a contract on the grounds of mistakes, fraudulent misrepresentations, or deceitful claims.
Verified Answer
HC
Hasrat ChauhanMay 25, 2024
Final Answer :
C
Explanation :
Even if the mistake is mutual,the adversely affected party will not have the right to avoid the contract unless the mistake concerns a basic assumption on which the contract was based.Assumptions about the identity,existence,quality,or quantity of the subject matter of the contract are among the basic assumptions on which contracts typically are founded.It is not necessary that the parties be consciously aware of the assumption;an assumption may be so basic that they take it for granted.An assumption would not be considered a basic assumption if it concerns a matter that bears an indirect or collateral relationship to the subject matter of the contract.
Learning Objectives
- Understand the legal reasons that permit the dissolution of a contract on the grounds of mistakes, fraudulent misrepresentations, or deceitful claims.