SOLVED

[Sale of KyRo’s Toys] Ky and Roland owned KyRo’s Toy Distributors together for many years. After years of arguing about sharing an office, they decided they no longer wanted to work together, even though each wanted to remain in the toy distribution business. They asked their accountant, Delia, to separate the accounts equitably, and she prepared a spreadsheet showing the value of KyRo’s accounts, and an equitable division of those accounts. Ky and Roland reviewed the division of accounts and signed a separation agreement that included a phrase that the accounts would be divided 50-50 as per Delia’s spreadsheet attached to the agreement. Both Ky and Roland signed a disclaimer that stated that they had reviewed the attachment. Six months later, when commissions arrived for the two separate companies, Ky noticed that he was making substantially less than one-half of what he made with KyRo, and upon investigation, realized that some of the financial information on which Delia had relied in preparing the spreadsheet had been outdated, and the accounts, were in fact, not divided equally. Ky now wants to rescind the separation agreement, claiming that all three elements of mutual mistake are present, and that the mistake about the division of accounts had a material effect on the agreement because it was not what was intended. 66) What must Ky show in order to meet the third requirement necessary to prove mutual mistake? A) That enforcement of the contract would have an adverse effect on both parties. B) That failure to enforce the contract would have an adverse effect on only one party. C) That enforcement of the contract would not have an adverse effect on either party. D) That failure to enforce the contract would have an adverse effect on both parties. E) That enforcement of the contract would have an adverse effect on the party who did not agree to bear the risk of mistake. 67) What effect might the disclaimer have on Ky’s claim? A) The disclaimer would have no effect since disclaimers in contracts are against public policy. B) The disclaimer would likely prevent Ky’s claim but only if the disclaimer was mutual. C) The disclaimer would prevent Ky’s claim because Ky affirmed that he had reviewed the spreadsheet. D) The disclaimer would likely not prevent Ky’s claim because the spreadsheet was based on erroneous information and Ky did not affirm that the information in the spreadsheet was correct. E) The disclaimer would prevent Ky’s claim because he signed it. 68) Which of the following is false about the concepts of mistake and misrepresentation? A) Unlike mistake, misrepresentation involves an untruthful assertion of material fact by one of the parties. B) Both mistake and misrepresentation scenarios can be unilateral or mutual. C) Unlike misrepresentation, mistake involves an untruthful assertion of material fact by one of the parties. D) Unlike mistake, in misrepresentation, only one party is in error about a material fact. E) Unlike misrepresentation, in mistake, only one party is in error about a material fact. 69) For a valid contract, courts insist on a . A) contractual meeting. B) mutual meeting. C) meeting of the minds. D) meeting of the parties. E) meeting of assent. 70) Can consumers take legal action against a company for misrepresentation of their products? A) Consumers cannot sue companies for misrepresentation of their products. B) Yes, if marketing materials, such as advertising, product labels, and packaging, are seen as misrepresenting what a product truly is or what benefits the product offers. C) Yes, but one cannot sue for inaccurate packaging or product labels. D) Consumers can only sue companies for misrepresentation of their products when there is a statute or public policy in place. E) Yes, but only if the product labels misrepresent what the product offers. Â Â