Question 1

In order to recover damages for fraud,the innocent party must prove that the fraud caused economic injury.

Accepted Answer

A) True 
 B)False

Question 2

Silence is actionable misrepresentation anytime it relates to a material fact.

Accepted Answer

A) True 
 B)False

Question 3

Barb bought a 1968 Plymouth Valiant with 24,000 miles (the correct mileage)on it from Jolly John's Gently Used Car Sales.John told Barb that this car was used by a little old lady who only used it to go to church on Sundays.A couple of months later,Barb learned that the little old lady's Sunday trips were to the bingo parlor,not to church,and Barb learns that John knew this all along.Based on this information,Barb can probably:

Accepted Answer

A)  get out of the contract on the basis of fraud 
B)  get out of the contract on the basis of undue influence 
C)  get out of the contract on the basis of unilateral mistake 
D)  get out of the contract on the basis of duress 
E)  not get out of the contract based on any of these reasons 
A)  get out of the contract on the basis of fraud 
B)  get out of the contract on the basis of undue influence 
C)  get out of the contract on the basis of unilateral mistake 
D)  get out of the contract on the basis of duress 
E)  not get out of the contract based on any of these reasons

Question 4

Under which of the following types of misrepresentation is the innocent party usually not able to rescind a contract?

Accepted Answer

A)  fraud in the inducement 
B)  fraud in the inception 
C)  silence as misrepresentation 
D)  misrepresentation of law 
E)  innocent misrepresentation 
A)  fraud in the inducement 
B)  fraud in the inception 
C)  silence as misrepresentation 
D)  misrepresentation of law 
E)  innocent misrepresentation

Question 5

Contracts involving fraud and misrepresentation are:

Accepted Answer

A)  actionable only if in writing 
B)  void 
C)  valid 
D)  voidable 
A)  actionable only if in writing 
B)  void 
C)  valid 
D)  voidable

Question 6

Neil owned a violin that he wanted to sell and Linda wanted to purchase.Both parties thought the violin to be a rare Stradivarius violin.They agreed on a price of $200,000.Later,it was discovered that the violin was just an ordinary violin,the value of which was only $10,000.Linda sues to recover her money.Discuss whether Linda is entitled to the return of her money or any other remedies.Fully discuss the legal theories involved.

Accepted Answer

This is a mutual mistake.The c

Question 7

Which of the following is true about misrepresentations of law?

Accepted Answer

A)  A misrepresentation of law is usually not a basis to recover because both parties are assumed to know the law. 
B)  A misrepresentation of law is treated as fraud in the inducement. 
C)  When an expert in the law makes a misrepresentation of law to a less sophisticated party,the misrepresentation is not actionable because each party is presumed to make its own investigation of the applicable law. 
D)  A misrepresentation of law is treated as a unilateral mistake. 
A)  A misrepresentation of law is usually not a basis to recover because both parties are assumed to know the law. 
B)  A misrepresentation of law is treated as fraud in the inducement. 
C)  When an expert in the law makes a misrepresentation of law to a less sophisticated party,the misrepresentation is not actionable because each party is presumed to make its own investigation of the applicable law. 
D)  A misrepresentation of law is treated as a unilateral mistake.

Question 8

The case that involved two ships,both of which were named "Peerless," is:

Accepted Answer

A)  Raffles v. Wichelhaus 
B)  Konic International Corp. v. Spokane Computer Services,Inc. 
C)  Wilson v. Western National Life Insurance Co. 
D)  Lucy v. Zehmer 
E)  Fisher v. Bell 
A)  Raffles v. Wichelhaus 
B)  Konic International Corp. v. Spokane Computer Services,Inc. 
C)  Wilson v. Western National Life Insurance Co. 
D)  Lucy v. Zehmer 
E)  Fisher v. Bell

Question 9

Sally is thinking about buying Linda's car.Linda knows that there is a leak in the brake line,and that after driving the car for a few minutes,the brake fluid will leak out and the car will have no brakes.Sally does not ask about it and Linda does not tell her.Sally buys the car,and while driving home,the brakes fail.Sally has an accident and the car is destroyed.Sally sues Linda for fraud to get her money back.Which is true?

Accepted Answer

A)  This is not fraud,since there was no misrepresentation. 
B)  This is not fraud,since there was no reliance. 
C)  This is not fraud,since there was no scienter. 
D)  Silence in this situation is a misrepresentation. 
E)  Silence is never a misrepresentation. 
A)  This is not fraud,since there was no misrepresentation. 
B)  This is not fraud,since there was no reliance. 
C)  This is not fraud,since there was no scienter. 
D)  Silence in this situation is a misrepresentation. 
E)  Silence is never a misrepresentation.

Question 10

Betsy told David about some wonderful development property that she owned in Florida.She offered to let him have a significant profit if he would invest in her development.After providing her with several thousands of dollars,David later discovered that there was no investment property in Florida.He should be able to state a claim of:

Accepted Answer

A)  Fraud in the Inducement 
B)  Fraud in the Inception 
C)  Fraud by Concealment 
D)  Unilateral Mistake 
A)  Fraud in the Inducement 
B)  Fraud in the Inception 
C)  Fraud by Concealment 
D)  Unilateral Mistake

Question 11

Where one party takes advantage of a confidential relationship when entering into a contract,the remedy would be based on:

Accepted Answer

A)  duress 
B)  unconscionability 
C)  undue influence 
D)  unilateral mistake 
E)  fraud in the execution 
A)  duress 
B)  unconscionability 
C)  undue influence 
D)  unilateral mistake 
E)  fraud in the execution

Question 12

Assuming that all the other elements of fraud are met,which of the following statements,if false,could be used to support a fraud claim?

Accepted Answer

A)  "This house should be able to withstand any wind Chicago can dish out." 
B)  "Before this house was redecorated,every room had very ugly wallpaper." 
C)  "Within 10 years,this house will be worth twice the price I am asking for it." 
D)  "The furnace was installed within the last five years." 
E)  "These window treatments I installed will still be in style in 2005." 
A)  "This house should be able to withstand any wind Chicago can dish out." 
B)  "Before this house was redecorated,every room had very ugly wallpaper." 
C)  "Within 10 years,this house will be worth twice the price I am asking for it." 
D)  "The furnace was installed within the last five years." 
E)  "These window treatments I installed will still be in style in 2005."

Question 13

Undue influence is characterized by one party being put at a disadvantage in a contract due to:

Accepted Answer

A)  a party taking advantage of superior knowledge about the subject matter in a contract 
B)  a party taking advantage of economic advantage in a transaction 
C)  a party taking advantage of it being less urgent for that party to reach an agreement 
D)  a party taking advantage of a fiduciary relationship 
E)  a party taking advantage of the other party's legal circumstances 
A)  a party taking advantage of superior knowledge about the subject matter in a contract 
B)  a party taking advantage of economic advantage in a transaction 
C)  a party taking advantage of it being less urgent for that party to reach an agreement 
D)  a party taking advantage of a fiduciary relationship 
E)  a party taking advantage of the other party's legal circumstances

Question 14

Bob sees a used car advertised as having 65,000 miles on it,the same as the odometer shows.Bob has the car inspected by a mechanic who says,"I think this car actually has about 100,000 miles on it,but it is in excellent condition." Frank buys the car and the engine fails a month later.Based on this,Frank:

Accepted Answer

A)  cannot avoid the contract on the basis of fraud 
B)  can avoid the contract on the basis of unilateral mistake 
C)  can avoid the contract on the basis of undue influence due to the incorrect mileage 
D)  can recover from the mechanic on the basis of fraud 
A)  cannot avoid the contract on the basis of fraud 
B)  can avoid the contract on the basis of unilateral mistake 
C)  can avoid the contract on the basis of undue influence due to the incorrect mileage 
D)  can recover from the mechanic on the basis of fraud

Question 15

When only one party to a contract is mistaken about a material fact that is the subject matter of the contract,that party will not be permitted to rescind the contract.

Accepted Answer

A) True 
 B)False

Question 16

No special relationship between the parties is necessary to find undue influence.

Accepted Answer

A) True 
 B)False

Question 17

Martha was selling some land she owned in Florida to Mary.Martha told Mary that there was a golf course and swimming pool in the subdivision as part of the development,and that other improvements would be made soon.Martha knew that none of these improvements existed and none were planned.Mary believed Martha and bought the land for $100,000 when it was really only worth $20,000.Mary learns of the error and sues Martha for fraud.Which of the following statements best describes this situation?

Accepted Answer

A)  Mary cannot recover because the misrepresentation was not of a material fact. 
B)  Mary cannot recover because she can prove no damages. 
C)  Mary can rescind the contract because this is an innocent misrepresentation,but Mary cannot collect damages. 
D)  Mary can rescind or recover damages because this is clearly fraud. 
E)  Either party can rescind because this is a case of mutual mistake. 
A)  Mary cannot recover because the misrepresentation was not of a material fact. 
B)  Mary cannot recover because she can prove no damages. 
C)  Mary can rescind the contract because this is an innocent misrepresentation,but Mary cannot collect damages. 
D)  Mary can rescind or recover damages because this is clearly fraud. 
E)  Either party can rescind because this is a case of mutual mistake.

Question 18

A preexisting relationship is a required element of a duress claim.

Accepted Answer

A) True 
 B)False

Question 19

Generally,a unilateral mistake allows either party to rescind the contract if the other party knew or should have known that a mistake was made.

Accepted Answer

A) True 
 B)False

Question 20

Assent may only be demonstrated by words.

Accepted Answer

A) True 
 B)False

Exam 13: Genuineness of Assent and Undue Influence

In order to recover damages for fraud,the innocent party must prove that the fraud caused economic injury.

Silence is actionable misrepresentation anytime it relates to a material fact.

Under which of the following types of misrepresentation is the innocent party usually not able to rescind a contract?

Contracts involving fraud and misrepresentation are:

Which of the following is true about misrepresentations of law?

The case that involved two ships,both of which were named "Peerless," is:

Where one party takes advantage of a confidential relationship when entering into a contract,the remedy would be based on:

Assuming that all the other elements of fraud are met,which of the following statements,if false,could be used to support a fraud claim?

Undue influence is characterized by one party being put at a disadvantage in a contract due to:

When only one party to a contract is mistaken about a material fact that is the subject matter of the contract,that party will not be permitted to rescind the contract.

No special relationship between the parties is necessary to find undue influence.

A preexisting relationship is a required element of a duress claim.

Generally,a unilateral mistake allows either party to rescind the contract if the other party knew or should have known that a mistake was made.

Assent may only be demonstrated by words.

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