Question 1

Intentional misrepresentation is commonly referred to as ________.

Accepted Answer

A) erroneous misrepresentation 
B) fraud 
C) duress 
D) undue influence 
A) erroneous misrepresentation 
B) fraud 
C) duress 
D) undue influence B

Question 2

________ occurs if a person is deceived as to the nature of his or her act and does not know what he or she is signing.

Accepted Answer

A) Fraud in the inducement 
B) Fraud in the factum 
C) Fraud by concealment 
D) Fraud by suppression 
A) Fraud in the inducement 
B) Fraud in the factum 
C) Fraud by concealment 
D) Fraud by suppression B

Question 3

An action to undo a contract is called restitution.

Accepted Answer

A) True 
 B)False  False

Question 4

The measure of damages, recovered from a misrepresentation, is ________.

Accepted Answer

A) the actual value of the property 
B) the represented value of the property 
C) the difference between the value of the property as represented and the actual value of the property 
D) twice the actual value of the property which includes punitive damages 
A) the actual value of the property 
B) the represented value of the property 
C) the difference between the value of the property as represented and the actual value of the property 
D) twice the actual value of the property which includes punitive damages

Question 5

John buys a watch for $100 at a vintage store.Later, the store learns that the watch was worn by Sean Connery in a James Bond movie and wishes to rescind the sales contract they have with John.Which of the following statements is true in this regard?

Accepted Answer

A) The store can rescind the contract immediately and refund $100 to John. 
B) The store can recover from John the difference between the value of the watch and the amount paid by John. 
C) The store can declare the contract void and pay John no money. 
D) The store cannot rescind or void the contract. 
A) The store can rescind the contract immediately and refund $100 to John. 
B) The store can recover from John the difference between the value of the watch and the amount paid by John. 
C) The store can declare the contract void and pay John no money. 
D) The store cannot rescind or void the contract.

Question 6

________ is an event that occurs when one person consciously decides to induce another person to rely and act on a misrepresentation.

Accepted Answer

A) Fraudulent misrepresentation 
B) Unilateral mistake 
C) Bilateral mistake 
D) Erroneous misrepresentation 
A) Fraudulent misrepresentation 
B) Unilateral mistake 
C) Bilateral mistake 
D) Erroneous misrepresentation

Question 7

Which of the following is true of misrepresentation?

Accepted Answer

A) Innocent misrepresentation is grounds for the aggrieved party to sue for damages. 
B) Misrepresentation of law is not actionable as fraud. 
C) Innocent misrepresentation cannot be treated as a mutual mistake. 
D) Misrepresentation of law can never be grounds for rescission of the contract. 
A) Innocent misrepresentation is grounds for the aggrieved party to sue for damages. 
B) Misrepresentation of law is not actionable as fraud. 
C) Innocent misrepresentation cannot be treated as a mutual mistake. 
D) Misrepresentation of law can never be grounds for rescission of the contract.

Question 8

Assent of a party to a contract may be manifested in any manner sufficient to show agreement, including conduct.

Accepted Answer

A) True 
 B)False

Question 9

Joe buys a trailer from a used-car dealership.On enquiry, the dealer tells him that the trailer is in great condition.However, three days later, the trailer breaks down.Investigation by Joe reveals that the trailer had seven previous owners and that the engine has been replaced thrice.An automobile expert tells Joe that the trailer is dangerous.Which of the following frauds would the dealer be liable for?

Accepted Answer

A) fraud in the factum 
B) fraud in the inducement 
C) silence as misrepresentation 
D) misrepresentation of law 
A) fraud in the factum 
B) fraud in the inducement 
C) silence as misrepresentation 
D) misrepresentation of law

Question 10

Intentional misrepresentation is considered fraud.

Accepted Answer

A) True 
 B)False

Question 11

Heather chooses to buy a scarf at Macy's and reads the price on the tag as $50.She uses her credit card to pay for the scarf, but post-purchase, she notices that the price tag actually says $500.This is an instance of a(n)________.

Accepted Answer

A) bilateral mistake 
B) mutual mistake of value 
C) innocent misrepresentation 
D) unilateral mistake 
A) bilateral mistake 
B) mutual mistake of value 
C) innocent misrepresentation 
D) unilateral mistake

Question 12

A unilateral mistake occurs if both parties know the object of the contract but are mistaken as to its value.

Accepted Answer

A) True 
 B)False

Question 13

Fraud in the factum occurs if a person is deceived as to the nature of his or her act and does not know what he or she is signing.

Accepted Answer

A) True 
 B)False

Question 14

If there has been a mutual mistake, the contract cannot be rescinded.

Accepted Answer

A) True 
 B)False

Question 15

Misrepresentation of law is a fraud that occurs when a person makes a statement of fact that he or she honestly and reasonably believes to be true even though it is not.

Accepted Answer

A) True 
 B)False

Question 16

In which of the following cases of assent is the rescission of a contract unenforceable?

Accepted Answer

A) mutual mistake of value 
B) misrepresentation of a material fact 
C) silence as misrepresentation 
D) innocent misrepresentation 
A) mutual mistake of value 
B) misrepresentation of a material fact 
C) silence as misrepresentation 
D) innocent misrepresentation

Question 17

Scienter means knowledge that a representation is false or that it was made without sufficient knowledge of the truth.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is true of misrepresentation of a material fact?

Accepted Answer

A) It can occur only by the words of the wrongdoer. 
B) A misrepresentation is actionable as fraud only if it is the sole factor in inducing the innocent party to enter into the contract. 
C) It is actionable as fraud if the misrepresentation is of a past or existing material fact. 
D) Predictions about the future are considered basis for fraud. 
A) It can occur only by the words of the wrongdoer. 
B) A misrepresentation is actionable as fraud only if it is the sole factor in inducing the innocent party to enter into the contract. 
C) It is actionable as fraud if the misrepresentation is of a past or existing material fact. 
D) Predictions about the future are considered basis for fraud.

Question 19

Which of the following is true of undue influence in entering contracts?

Accepted Answer

A) Undue influence need not require the overcoming of the innocent party's free will. 
B) Undue influence is not grounds for prosecution, as the innocent party has complete freedom to evaluate the terms of the contract. 
C) A contract that is entered into because of undue influence is not voidable. 
D) A fiduciary or confidential relationship must have existed between the parties for undue influence to be proven. 
A) Undue influence need not require the overcoming of the innocent party's free will. 
B) Undue influence is not grounds for prosecution, as the innocent party has complete freedom to evaluate the terms of the contract. 
C) A contract that is entered into because of undue influence is not voidable. 
D) A fiduciary or confidential relationship must have existed between the parties for undue influence to be proven.

Question 20

________ is an action to undo a contract.

Accepted Answer

A) Rescission 
B) Recession 
C) Restitution 
D) Inception 
A) Rescission 
B) Recession 
C) Restitution 
D) Inception

Exam 13: Genuineness of Assent and Undue Influence

Intentional misrepresentation is commonly referred to as ________.

________ occurs if a person is deceived as to the nature of his or her act and does not know what he or she is signing.

An action to undo a contract is called restitution.

The measure of damages, recovered from a misrepresentation, is ________.

John buys a watch for $100 at a vintage store.Later, the store learns that the watch was worn by Sean Connery in a James Bond movie and wishes to rescind the sales contract they have with John.Which of the following statements is true in this regard?

________ is an event that occurs when one person consciously decides to induce another person to rely and act on a misrepresentation.

Which of the following is true of misrepresentation?

Assent of a party to a contract may be manifested in any manner sufficient to show agreement, including conduct.

Intentional misrepresentation is considered fraud.

Heather chooses to buy a scarf at Macy's and reads the price on the tag as $50.She uses her credit card to pay for the scarf, but post-purchase, she notices that the price tag actually says $500.This is an instance of a(n)________.

A unilateral mistake occurs if both parties know the object of the contract but are mistaken as to its value.

Fraud in the factum occurs if a person is deceived as to the nature of his or her act and does not know what he or she is signing.

If there has been a mutual mistake, the contract cannot be rescinded.

Misrepresentation of law is a fraud that occurs when a person makes a statement of fact that he or she honestly and reasonably believes to be true even though it is not.

In which of the following cases of assent is the rescission of a contract unenforceable?

Scienter means knowledge that a representation is false or that it was made without sufficient knowledge of the truth.

Which of the following is true of misrepresentation of a material fact?

Which of the following is true of undue influence in entering contracts?

________ is an action to undo a contract.

Legal Heritage and the Digital Age

Courts and Jurisdiction

Judicial,Alternative,and E-Dispute Resolution

Constitutional Law for Business and E-Commerce

Intentional Torts and Negligence

Product and Strict Liability

Intellectual Property and Cyber Piracy

Criminal Law and Cyber Crimes

Nature of Traditional and E-Contracts

Agreement

Consideration and Promissory Estoppel

Capacity and Legality

Statute of Frauds and Equitable Exceptions

Third-Party Rights and Discharge

Remedies for Breach of Traditional and E-Contracts

E-Commerce and Digital Law

Formation of Sales and Lease Contracts

Title to Goods and Risk of Loss

Remedies for Breach of Sales and Lease Contracts

Warranties

Creation of Negotiable Instruments

Holder in Due Course and Transferability

Liability, Defenses, and Discharge

Banks, E-Money, and Financial Reform

Credit,Mortgages,and Debtor's Rights

Secured Transactions and E-Filing

Bankruptcy and Reorganization

Agency Formation and Termination

Liability of Principals, Agents, and Independent Contractors

Employment, Worker Protection, and Immigration Law

Labor Law and Collective Bargaining

Equal Opportunity in Employment

Small Business, Entrepreneurship, and General Partnerships

Limited Partnerships and Special Partnerships

Corporate Formation and Financing

Corporate Governance and the Sarbanes-Oxley Act

Corporate Acquisitions and Multinational Corporations

Limited Liability Companies and Limited Liability Partnerships

Franchises and Special Forms of Businesses

Investor Protection, E-Securities, and Wall Street Reform

Ethics and Social Responsibility of Business

Administrative Law and Regulatory Agencies

Consumer Protection and Product Safety

Environmental Protection

Antitrust Law and Unfair Trade Practices

Personal Property and Bailment

Real Property

Landlord-Tenant Law and Land Use Regulation

Insurance

Accountants' Duties and Liability

Wills Trusts and Estates

Family Law

International and World Trade Law

Filters