COB218 Chapter 13 Questions Complete Marking Scheme

COB218 Chapter 13 Questions Complete Marking Scheme Nora enters into a contract with Oceanic Transport, Inc., to insure and ship a painting from France to the United States for a certain price. But Oceanic makes a mistake in adding the costs, which results in a contract price that is $1,000 less than the true cost. Most likely, a court would - ANSWER- allow the parties to rescind the contract. Garth owns two all-terrain vehicles (ATVs), worth $1,000 and $500, re-spec-tively. Helen agrees to buy "Garth's ATV" for $750. Garth believes, in good faith, that he is selling the $500 ATV. Helen believes, in good faith, that she is buying the $1,000 ATV. In this situation - ANSWER- there is no contract. Byron agrees to sell to Charity, for $1,500, a remote parcel of land. They be-lieve the land to be worthless, but beneath it is a gold mine. Byron can - ANSWER- not rescind the contract. Lewis, an employee of Silos, Inc., makes a substantial mathematical error in totaling the estimated costs for a project for which AgriCo-op is seeking bids. Consequently, Silos's bid is significantly low. - ANSWER- if AgriCo-op knew or should have known of the mistake. Refer to Fact Pattern 13-1. Any contract with AgriCo-op that includes the mistake may be rescinded - ANSWER- if the error was made inadvertently and without gross negligence. Kari, a real estate agent, assures Linc that a certain parcel of commercial property fronts on the most highly trafficked street in Metro City. Linc buys the property and then discovers that the street has no more traffic than any other in its vicinity. Linc is most likely a victim of - ANSWER- fraud. Garland induces Jules to enter into a contract for the purchase of a Chef's Burger House restaurant. Garland knowingly misrepresents a number of material features about the restaurant and the business. When Jules discovers the truth, he can - ANSWER- rescind the contract on the basis of fraud.