Question 1

________ is a mistake made by both parties concerning an object that is important to the subject matter of a contract.

Accepted Answer

A) Mutual mistake of value 
B) Mutual mistake of material fact 
C) Elementary unilateral mistake 
D) Fraud by concealment 
A) Mutual mistake of value 
B) Mutual mistake of material fact 
C) Elementary unilateral mistake 
D) Fraud by concealment

Question 2

Predictions about the future generally do not form the basis for fraud.

Accepted Answer

A) True 
 B)False

Question 3

If there is a confidential relationship between persons, any contract made by the servient party that benefits the dominant party is presumed to be entered into under undue influence.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is not actionable as fraud?

Accepted Answer

A) misrepresentation of law 
B) silence as misrepresentation 
C) marriage to obtain rights of immigration 
D) identity theft 
A) misrepresentation of law 
B) silence as misrepresentation 
C) marriage to obtain rights of immigration 
D) identity theft

Question 5

The measure of damages awarded to the innocent party for fraud is the difference between the value of the property as represented and the actual value of the property.

Accepted Answer

A) True 
 B)False

Question 6

Contracts involving fraud in inducement are ________.

Accepted Answer

A) valid 
B) void 
C) voidable 
D) non-rescindable 
A) valid 
B) void 
C) voidable 
D) non-rescindable

Question 7

Kevin goes to the store to purchase a fully-automatic washing machine.He browses through several models of washing machines but does not let the salespersons know that he wants a fully-automatic model.While signing the sales contract, he does not notice that the model he is purchasing is a semi-automatic machine.After purchase, which of the following options does Kyle have?

Accepted Answer

A) Exchange the machine with a fully-automatic one and sue the store if its does not accept it. 
B) Demand a full cash refund from the store for fraud in concealment. 
C) Sue the store for its innocent misrepresentation. 
D) Keep the semi-automatic washing machine as he made a unilateral mistake. 
A) Exchange the machine with a fully-automatic one and sue the store if its does not accept it. 
B) Demand a full cash refund from the store for fraud in concealment. 
C) Sue the store for its innocent misrepresentation. 
D) Keep the semi-automatic washing machine as he made a unilateral mistake.

Question 8

A contract in which both parties are mistaken about the value of the object of the contract is considered ________.

Accepted Answer

A) unenforceable 
B) unconscionable 
C) non-rescindable 
D) void 
A) unenforceable 
B) unconscionable 
C) non-rescindable 
D) void

Question 9

Taking advantage of another person's mental, emotional, or physical weakness and unduly persuading that person to enter into a contract constitutes duress.

Accepted Answer

A) True 
 B)False

Question 10

While signing a contract, one of the parties misinterpreted a legal clause.Neither of the parties is a legal professional.Which of the following statements holds well in this scenario?

Accepted Answer

A) The party who misinterpreted the law is actionable for fraud. 
B) The party who misinterpreted the law may rescind the contract. 
C) The party who misinterpreted the law is not actionable for fraud. 
D) The contract is declared unenforceable as the law has been misinterpreted. 
A) The party who misinterpreted the law is actionable for fraud. 
B) The party who misinterpreted the law may rescind the contract. 
C) The party who misinterpreted the law is not actionable for fraud. 
D) The contract is declared unenforceable as the law has been misinterpreted.

Question 11

Which of the following is true of misrepresentation?

Accepted Answer

A) A misrepresentation is not actionable unless the innocent party relied on the misrepresentation and acted on it. 
B) An innocent party who acts in reliance on a misrepresentation need not justify his or her reliance. 
C) An innocent party must prove that the wrongdoer's misrepresentation was the sole reason he or she entered into the contract. 
D) An innocent party need not prove economic injury to recover damages for fraud. 
A) A misrepresentation is not actionable unless the innocent party relied on the misrepresentation and acted on it. 
B) An innocent party who acts in reliance on a misrepresentation need not justify his or her reliance. 
C) An innocent party must prove that the wrongdoer's misrepresentation was the sole reason he or she entered into the contract. 
D) An innocent party need not prove economic injury to recover damages for fraud.

Question 12

Duress is said to have occurred only where a threat involved a physical harm.

Accepted Answer

A) True 
 B)False

Question 13

Gary and Mary are siblings involved in a legal tangle over who gets possession of their ancestral home.Gary threatens to kill Mary's husband if she does not sign papers declaring Gary's sole ownership of their home.This is an instance of ________.

Accepted Answer

A) scienter 
B) battery 
C) undue influence 
D) duress 
A) scienter 
B) battery 
C) undue influence 
D) duress

Question 14

Innocent misrepresentation is treated as a mutual mistake.

Accepted Answer

A) True 
 B)False

Question 15

When one party takes specific action to cover a material fact from another party, fraud by enticement occurs.

Accepted Answer

A) True 
 B)False

Question 16

Explain the three kinds of mistakes that can be made by either party while entering a contract.When are contracts involving mistakes rescinded?

Accepted Answer

Mistakes may be either unilateral or mut

Question 17

To be actionable as fraud, the misrepresentation must have been the sole factor in inducing the innocent party to enter into the contract.

Accepted Answer

A) True 
 B)False

Question 18

Leona drove into an eatery and ordered Volcano Chicken.Harry, who took her order, was a new employee who had started working in the eatery the same day.When asked if the chicken she ordered was very spicy, Leona was informed by Harry-who was not aware of all details of the eatery yet-that it was not.However, when Leona took a bite, she found the hot sauce extremely spicy which resulted in her choking on the piece of chicken and requiring medical help.Which of the following statements is true in this context?

Accepted Answer

A) Harry can be sued for fraud in inducement. 
B) Harry's employment can be terminated for having committed fraud in inception. 
C) Harry can be sued for innocent misrepresentation. 
D) Harry cannot be sued for innocent misrepresentation. 
A) Harry can be sued for fraud in inducement. 
B) Harry's employment can be terminated for having committed fraud in inception. 
C) Harry can be sued for innocent misrepresentation. 
D) Harry cannot be sued for innocent misrepresentation.

Question 19

How is a mistake different from fraud?

Accepted Answer

A mistake occurs where one or both of th

Question 20

Which of the following scenarios makes Tim liable for undue influence?

Accepted Answer

A) Tim uses a false identity, borrows $10, 000 from Kelly, and disappears with the money. 
B) Tim threatens to kill Carlos if Carlos does not sign a contract that transfers all his property to Tim. 
C) Tim takes advantage of his grandmother's illness and persuades her to sign a will leaving all her property to him. 
D) Tim threatens to bring a lawsuit against David if David does not make him a partner in his firm. 
A) Tim uses a false identity, borrows $10, 000 from Kelly, and disappears with the money. 
B) Tim threatens to kill Carlos if Carlos does not sign a contract that transfers all his property to Tim. 
C) Tim takes advantage of his grandmother's illness and persuades her to sign a will leaving all her property to him. 
D) Tim threatens to bring a lawsuit against David if David does not make him a partner in his firm.

Exam 13: Genuineness of Assent and Undue Influence

________ is a mistake made by both parties concerning an object that is important to the subject matter of a contract.

Predictions about the future generally do not form the basis for fraud.

If there is a confidential relationship between persons, any contract made by the servient party that benefits the dominant party is presumed to be entered into under undue influence.

Which of the following is not actionable as fraud?

The measure of damages awarded to the innocent party for fraud is the difference between the value of the property as represented and the actual value of the property.

Contracts involving fraud in inducement are ________.

A contract in which both parties are mistaken about the value of the object of the contract is considered ________.

Taking advantage of another person's mental, emotional, or physical weakness and unduly persuading that person to enter into a contract constitutes duress.

While signing a contract, one of the parties misinterpreted a legal clause.Neither of the parties is a legal professional.Which of the following statements holds well in this scenario?

Which of the following is true of misrepresentation?

Duress is said to have occurred only where a threat involved a physical harm.

Gary and Mary are siblings involved in a legal tangle over who gets possession of their ancestral home.Gary threatens to kill Mary's husband if she does not sign papers declaring Gary's sole ownership of their home.This is an instance of ________.

Innocent misrepresentation is treated as a mutual mistake.

When one party takes specific action to cover a material fact from another party, fraud by enticement occurs.

Explain the three kinds of mistakes that can be made by either party while entering a contract.When are contracts involving mistakes rescinded?

To be actionable as fraud, the misrepresentation must have been the sole factor in inducing the innocent party to enter into the contract.

How is a mistake different from fraud?

Which of the following scenarios makes Tim liable for undue influence?

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