Exam 11: Conduct Invalidating Assent

The test for duress is objective and the act must be classified as a tort or a crime in order to be wrongful.

Sam wants to sell his Golden Retriever to Jordan.Sam tells Jordan that the dog is three years old and that he will point,back,and retrieve.Although the dog is three years old and will point at birds,he will not back (honor another dog's point)or retrieve.Jordan relies on these statements and purchases the bird dog.The buyer has most probably been a victim of:

To sustain a case of fraud in the inducement,the injured party must prove that he actually relied upon the false representation.

Alex wants to submit a bid on a city sewer project.He computes the cost,but mistakenly omits the cost of one item.Accordingly,he submits a bid of $430,000 to the city.The next highest bid is $675,000,and the rest of the bids are even higher.The city is happy to have such a low bid,so it accepts Alex's bid and awards him the contract for the job,even though the city engineer is of the opinion the job cannot be done for less than $650,000.In this case:

A basic element of fraud is a false representation or a misrepresentation.

Define fiduciary and discuss its effect on a contract.

Fraud in the inducement will render an agreement void.

Marjorie has been cared for by her family physician for 35 years.She decides to assume the mortgage on his new clinic.The contract is automatically invalid because of undue influence.

Brysen sells bikes at a local discount store.To encourage Cole to buy a more expensive model than he originally contemplated,Brysen tells Cole,"This is the most awesome bike you can buy at this price.You can expect lots of riding pleasure." Based on this statement Cole buys the bike.A week later,before his bike is fully paid for,Cole sees a far superior bike for a lower price at another store.Cole can avoid his contract with Brysen because of fraudulent misrepresentation.

Mistake by failure to read a document is grounds to void a contract.

Zach owns property that he believes is worth $400,000.Chloe knows that there is gold on the property and offers Zach $500,000 for it.Zach accepts and sells the property to Chloe.Zach later realizes that the property was worth more than $500,000.Zach can have the contract avoided based upon fraud.

Zach owns property that he believes is worth $400,000.Chloe knows that there is gold on the property and offers Zach $500,000 for it. She says she would like to live in the country.Zach then asks her if she thinks there might be valuable minerals on the land.Chloe laughs and says she doubts that very much,so Zach sells her the farm for $500,000.Zach later realizes that the land was worth more than he was paid.Chloe's statement to Zach was a misrepresentation requisite for fraud.

The difference between fraud and misrepresentation is that fraud involves malice while nonfraudulent misrepresentation is always innocent.

There are two distinct types of fraud.

A contract was made for 125 bales of cotton to arrive on a ship named "Peerless" from Bombay.Unbeknownst to either party to the contract,there were two ships named "Peerless," both of which were sailing from Bombay.One sailed in October and the other in December.The buyer had in mind the ship sailing in October,but the seller had in mind the ship sailing in December.Each party held his belief in good faith.The goods failed to arrive on time.If the buyer sues for breach of contract:

Fred is a concert violinist who is scheduled to perform at Carnegie Hall for the first time.He buys what he is told is a Stradivarius violin from a well-known,reputable dealer in quality violins,and he pays the going rate for a Stradivarius.He later learns the violin is an imitation,although it is such a good imitation that even the dealer thought it was authentic.In this case:

Which of the following would be considered to be a misrepresentation of a material fact for purposes of establishing fraud in the inducement?

Pat told her friends that her car got 35 miles to the gallon in the city when in reality it only got 20 miles per gallon.When Pat decides to sell the car and one of her friends decides to buy it,Pat is under no duty to tell the correct figure unless asked.

Blake tries to sell his classic car to Victoria for $12,000.Blake tells Victoria,"I paid $12,000 for the car in 1978 and it's worth twice that today." Blake really paid $8,000 for the car in 1978.If Victoria buys the car,basing her decision on Blake's statement,which of the following correctly states the situation?

Which of the following can meet the scienter requirement to establish fraud in the inducement?