A contract can be rescinded when both parties are mutually mistaken about a basic assumption that materially affects the agreed exchange, even in the absence of fraud or misrepresentation.
False
True
The correct answer is true because contract law allows rescission on the grounds of mutual mistake, provided that the mistake pertains to a basic assumption that materially affects the agreement. Rescission in these cases seeks to undo the contract and restore the parties to their pre-contractual positions. Fraud or misrepresentation are not prerequisites for rescission based on mutual mistake, though they can independently justify rescission.
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