Question

Mary contracts to sell Rachel her violin for $10,000, based on an appraisal of the instrument. Their contract provides that even if the appraisal is later found to be mistaken, the sale price will not be altered. One month after the sale, Rachel learns that the violin is only worth $5000. Which of the following is true:____________

A) Because the contract specified what would happen in the case of a mistake,the sale price will not be altered.
B) Mary must refund Rachel $5000, because the appraisal was mistaken.
C) The contract is unenforceable, because the appraisal was mistaken.
D)The contract is void, because the sale is fraudulent.

Answer 1

A) Because the contract specified what would happen in the case of a mistake,the sale price will not be altered.

Step-by-step explanation:

When a contract is formed between different parties there is an offer and acceptance of the terms of the contract.

In this instance the agreement was made after an appraisal of the violin. It was agreed that even if the appraisal was found to be faulty the price would not change from $10,000 agreed upon.

Therefore when Rachael realised the price is $5,000 after one month, the price will not change because the contract specified what would happen in the case of a mistake, the sale price will not be altered.

Even when there is no appraisal and the buyer accepts terms, the error of not properly validating the price of the product is on the buyer. The onus is on the buyer to establish the right price for the good.

Answer 2

A. Because the contract specified what would happen in the case of a mistake,the sale price will not be altered.

Step-by-step explanation:

Once the contract for the sale has been accepted and signed by Rachel to purchase the violin for $10,000 after an initial appraisal of the instrument, it is sealed and binding.

Better still, the contract specified that "even if the appraisal is later found to be altered, the sale price will not be altered", therefore, Rachel cannot do anything about her recent discovery on the worth of the violin.