Paco Corp. ,a building contractor,offered to sell Roy several pieces of used construction equipment.Roy,engaged in the business of buying and selling equipment,accepted the offer.Paco's written offer had been prepared by a secretary who typed the total price as $10,900,rather than $109,000,which was the approximate fair market value of the equipment.Paco learned of the error in the offer and refused delivery of the equipment unless Roy agreed to pay $109,000.Roy sued Paco for breach of contract.Which of the following scenarios is the likely outcome?
A)Paco will not be liable because there has been a mutual mistake of fact.
B)Paco will be able to rescind the contract because Roy should have known that the price was erroneous.
C)Roy will prevail because Paco is a merchant.
D)The contract is enforceable because Roy had accepted it.

Question

Quizplus · Accepted Answer

Courts permit avoidance in cases of unilateral mistake if the mistake was so obvious that the nonmistaken party had reason to realize that a mistake had been made.Roy probably had knowledge of the value of the contract as he is in the business of selling and buying equipment and should have immediately informed Paco of the mistake in good faith.Therefore,Paco would be able to rescind the contract.

Paco Corp ,A Building Contractor,offered to Sell Roy Several Pieces of of Used