Question 1

In executing its discretion to grant relief when a party makes a mistake about terms

Accepted Answer

A) the court will correct the document. 
B) the court will determine the burden of proof. 
C) the court will consider the hardship that will be suffered by each party. 
D) the court will adopt the position of the plaintiff. 
E) the court will determine each party's interpretation of the terms. 
A) the court will correct the document. 
B) the court will determine the burden of proof. 
C) the court will consider the hardship that will be suffered by each party. 
D) the court will adopt the position of the plaintiff. 
E) the court will determine each party's interpretation of the terms.

Question 2

Paul,a poor farmer,has just learned he has a serious medical problem.The medication needed is extremely expensive and not covered by medical insurance.Hearing of his plight,the next-door neighbour offers to buy Paul's prize steer,but at half its value.Paul feels he has no choice but to sell the steer,because he needs the money,so he agrees to sell it for half its value.Legally speaking,what has this neighbour done?

Accepted Answer

A) failed to act in the "utmost good faith" 
B) committed a morally objectionable,yet perfectly legal,act 
C) exerted undue influence over Paul 
D) coerced Paul into selling under duress 
E) exploited a "special relationship" 
A) failed to act in the "utmost good faith" 
B) committed a morally objectionable,yet perfectly legal,act 
C) exerted undue influence over Paul 
D) coerced Paul into selling under duress 
E) exploited a "special relationship"

Question 3

Misrepresentation can affect the contract only if the misrepresentation is

Accepted Answer

A) known by the defendant. 
B) negligent or fraudulent. 
C) in writing,not oral. 
D) prior to the contract negotiations. 
E) a statement of fact,not opinion. 
A) known by the defendant. 
B) negligent or fraudulent. 
C) in writing,not oral. 
D) prior to the contract negotiations. 
E) a statement of fact,not opinion.

Question 4

What are the two main types of mistake in contract law?

Accepted Answer

The two main types of mistake

Question 5

Linda's lawyer took a city lot she owned in payment for services rendered.Now Linda is claiming undue influence and suing to get the land back.What must she prove and what must the lawyer try to prove?

Accepted Answer

Linda must show that the circumstances w

Question 6

A party who seeks rectification of a document must satisfy the conditions for rectification.Explain.

Accepted Answer

Rectification is the correction of a wri

Question 7

Scott,an independent businessman,is asking his wife to pledge her inherited family homestead towards a business loan he has arranged at the bank.She seems perfectly willing to do this.Yet,to avoid a possible later legal claim of undue influence by Scott's wife,which would be wisest for the bank to do?

Accepted Answer

A) have Scott's wife get independent legal counsel 
B) explain very carefully what would transpire 
C) place all transactions under seal 
D) have the wife sign a paper to the effect that she was not unduly influenced 
E) have Scott's lawyer thoroughly explain to Scott's wife the legal implications 
A) have Scott's wife get independent legal counsel 
B) explain very carefully what would transpire 
C) place all transactions under seal 
D) have the wife sign a paper to the effect that she was not unduly influenced 
E) have Scott's lawyer thoroughly explain to Scott's wife the legal implications

Question 8

Explain the importance of independent legal advice.

Accepted Answer

Independent legal advice is important to

Question 9

Regarding insurance contracts,utmost good faith is important because

Accepted Answer

A) insurance records follow the policy holder for life. 
B) the insurance company is in a position of superior knowledge. 
C) the insured must calculate her or his risks. 
D) third parties may be involved-especially with liability policies. 
E) without it,there is fraudulent omission. 
A) insurance records follow the policy holder for life. 
B) the insurance company is in a position of superior knowledge. 
C) the insured must calculate her or his risks. 
D) third parties may be involved-especially with liability policies. 
E) without it,there is fraudulent omission.

Question 10

The most fundamental mistake that radically changes the nature of the bargain of the parties is a mistake about the existence of the subject matter of the contract.

Accepted Answer

A) True 
 B)False

Question 11

If a party to an existing contract discovers he or she had made an incorrect statement during the contract negotiations,then he or she should

Accepted Answer

A) rescind the contract immediately. 
B) declare the contract voidable at the option of the other party. 
C) call his or her lawyer before he or she is sued for negligent misrepresentation. 
D) inform the other party of the true situation as soon as possible. 
E) offer to make allowances for any misunderstandings. 
A) rescind the contract immediately. 
B) declare the contract voidable at the option of the other party. 
C) call his or her lawyer before he or she is sued for negligent misrepresentation. 
D) inform the other party of the true situation as soon as possible. 
E) offer to make allowances for any misunderstandings.

Question 12

Explain the difference in approach of common law and equity to a contract that is entered into by a party under a mistake as to identity caused by the fraud or deceit of the other party.

Accepted Answer

The approach of common law to this situa

Question 13

Why does the Bill of Goods Act restrict the doctrine of caveat emptor in relation to problems with ownership of goods?

Accepted Answer

Caveat emptor relates to the quality of

Question 14

Kevin was desperate to save his business records and equipment from the rising flood waters.Just then,a stranger with a large truck drove by,and Kevin,feeling that he had little choice,said,"I'll give you your choice of my equipment if you help me save my business records and equipment." The stranger agreed and chose some equipment and a laptop computer.After the flood,Kevin demanded everything back.The stranger refused to return the new laptop computer.On what legal grounds can Kevin get his computer back?

Accepted Answer

A) undue influence 
B) duress 
C) coercion 
D) dire circumstances 
E) No basis; this is a valid contract that has fair consideration on both sides. 
A) undue influence 
B) duress 
C) coercion 
D) dire circumstances 
E) No basis; this is a valid contract that has fair consideration on both sides.

Question 15

Jonathan sells crates of tomatoes on board the SS Apapa to Margaret.At the time of the sale,both parties are unaware that the crates were washed overboard.What is the status of the contract between Jonathan and Margaret?

Accepted Answer

A) Jonathan is still the owner of the shipment.Jonathan bears the loss and will have to refund Margaret's money. 
B) Margaret has to pay the agreed price and recover from her insurance. 
C) The ownership passed to Margaret,but Jonathan is still in possession,and so he is liable. 
D) Margaret is the new owner of the tomatoes and has to bear the loss. 
E) Margaret may sue Jonathan for the tort of deceit. 
A) Jonathan is still the owner of the shipment.Jonathan bears the loss and will have to refund Margaret's money. 
B) Margaret has to pay the agreed price and recover from her insurance. 
C) The ownership passed to Margaret,but Jonathan is still in possession,and so he is liable. 
D) Margaret is the new owner of the tomatoes and has to bear the loss. 
E) Margaret may sue Jonathan for the tort of deceit.

Question 16

Common mistake is a situation in which both parties believe the same misunderstanding or mistake about the contract.

Accepted Answer

A) True 
 B)False

Question 17

In law,"utmost good faith" means a level of trust in

Accepted Answer

A) not using undue influence. 
B) not making false assertions. 
C) disclosing all pertinent information concerning the contract. 
D) only giving factual statements. 
E) being aboveboard with all affairs. 
A) not using undue influence. 
B) not making false assertions. 
C) disclosing all pertinent information concerning the contract. 
D) only giving factual statements. 
E) being aboveboard with all affairs.

Question 18

Mistake about terms does NOT include

Accepted Answer

A) the attribution by the parties of different meanings to words used in a contract. 
B) errors that are made in the recording of an agreement between parties. 
C) the error of judgment that a party makes when he or she enters into a bad contract. 
D) misunderstandings about the meanings of words used in a contract. 
E) words used inadvertently in stating the terms of a contract. 
A) the attribution by the parties of different meanings to words used in a contract. 
B) errors that are made in the recording of an agreement between parties. 
C) the error of judgment that a party makes when he or she enters into a bad contract. 
D) misunderstandings about the meanings of words used in a contract. 
E) words used inadvertently in stating the terms of a contract.

Exam 9: Grounds Upon Which a Contract May Be Set Aside: Mistake and Misrepresentation

In executing its discretion to grant relief when a party makes a mistake about terms

Misrepresentation can affect the contract only if the misrepresentation is

What are the two main types of mistake in contract law?

Linda's lawyer took a city lot she owned in payment for services rendered.Now Linda is claiming undue influence and suing to get the land back.What must she prove and what must the lawyer try to prove?

A party who seeks rectification of a document must satisfy the conditions for rectification.Explain.

Explain the importance of independent legal advice.

Regarding insurance contracts,utmost good faith is important because

The most fundamental mistake that radically changes the nature of the bargain of the parties is a mistake about the existence of the subject matter of the contract.

If a party to an existing contract discovers he or she had made an incorrect statement during the contract negotiations,then he or she should

Explain the difference in approach of common law and equity to a contract that is entered into by a party under a mistake as to identity caused by the fraud or deceit of the other party.

Why does the Bill of Goods Act restrict the doctrine of caveat emptor in relation to problems with ownership of goods?

Jonathan sells crates of tomatoes on board the SS Apapa to Margaret.At the time of the sale,both parties are unaware that the crates were washed overboard.What is the status of the contract between Jonathan and Margaret?

Common mistake is a situation in which both parties believe the same misunderstanding or mistake about the contract.

In law,"utmost good faith" means a level of trust in

Mistake about terms does NOT include

Law, society, and Business

The Machinery of Justice

Government Regulation of Business

The Law of Torts

Professional Liability: the Legal Challenges

Formation of a Contract: Offer and Acceptance

Formation of a Contract: Consideration and Intention

Formation of a Contract: Capacity to Contract and Legality of Object

Writing and Interpretation

Privity of Contract and the Assignment of Contractual Rights

The Discharge of Contracts

Breach of Contract and Its Remedies

Sale of Goods and Consumer Contracts

Bailment and Leasing

Insurance and Guarantee

Agency and Franchising

The Contract of Employment

Negotiable Instruments

Intellectual Property

Interests in Land and Their Transfer

Landlord and Tenant

Mortgages of Land and Real Estate Transactions

Sole Proprietorships and Partnerships

The Nature of a Corporation and Its Formation

Corporate Governance: the Internal Affairs of Corporations

Corporate Governance: External Responsibilities

Secured Transactions

Creditors Rights

International Business Transactions

Electronic Commerce

Privacy

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