Assuming that the economic condition of the country is progressing,Peter entered into a contract with John for the sale of substantial amount of shares of his company for consideration of $1,000,000.However,due to a slump in the market in the next few months,Peter lost heavily.This would lead to:
A)avoidance of the contract.
B)enforcement of the contract.
C)rescission of the contract.
D)reformation of the contract.

Question

Quizplus · Accepted Answer

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.Peter's assumption would not be considered a basic assumption as his mistake concerns the market conditions and bears an indirect or collateral relationship to the subject matter of the contract,which usually do not give rise to avoidance of the contract.Hence,the contract is enforceable.

Assuming That the Economic Condition of the Country Is Progressing,Peter