48.When a mistake occurs as to the market value of the object of a contract a.ei

Question

48.When a mistake occurs as to the market value of the object of a contract

a.either party can enforce the contract.

b.either party can enforce the contract if the mistake if not more than 20% of the true market value.

c.either party can rescind the contract for failure of consideration.

d.the contract is enforceable by either party if the object of the contract is tangible personal property but not real property.

49.When the offeror and offeree of a contract are mistaken as to the same material fact

a.either party can rescind the contract at any time.

b.both parties must agree to rescind the contract.

c.either party can rescind the contract but only if done so promptly

d.there can be no recission if it is a third party beneficiary contract.

Explanation / Answer

Answer 48:

a.either party can enforce the contract.

Reason: There is an existence of mutual mistake if both parties knows the object to contract but are mistaken about its value. In this scenario the contract will be enforceable by either of the parties as the identity of the subject matter of contract is not an issue.

Answer 49 :

a.either party can rescind the contract at any time

Reason: As there is mistake regarding material fact, either of the party can respond the contract at any point of time. Material fact as the key element of cobtract should not be mistaken.

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