Exam 13: Capacity and Consent

Larson entered Forrester's Auto Mart to purchase a used car.Larson found a vehicle with a sales price of $11,000.After Forrester answered all of Larson's questions,Forrester and Larson agreed to a sale.As Larson was leaving to get the money to pay for the car,Forrester told Larson that Robert Redford formerly owned the car.Larson later learned that Robert Redford had never owned the car.If Larson seeks to rescind the deal based on Forrester's statement,Larson will:

All states allow the remedy of rescinding a contract for the sale of goods while still allowing the remedy of suing for damages.

Pamela is planning to sell her home decorating store to her daughter.Pamela has:

Ron,a minor,goes to the hospital for treatment of the flu.On the new-patient form Ron signs,he agrees to pay for any care or treatment he receives.When billed for the treatment:

A party to a contract has a duty to investigate the other party's factual statements.

Discuss two types of misrepresentation and how they differ.List the three things a party must show to rescind a contract based on misrepresentation.

Which of the following is NOT a true statement about fraud?

Marty,a 16-year-old,contracted with Cream-of-the-Crop Cycles to buy an $8,000 motorcycle.He agreed to make monthly payments until the purchase price plus interest were paid in full.It is three years later and Marty has not disaffirmed the contract and has made regular payments on the cycle since turning 18.Which of the following is correct?

If a salesperson says,"This is a great car and it's really fun to drive," but the car turns out to be a lemon,the salesperson has committed fraud.

Alice offers to sell her car to Barry for $500,and Barry accepts.Alice's car has a market value of $1,000 but this fact is unknown to Alice.The contract is enforceable.

Which of the following is least likely to be regarded as a necessary?

The most accurate statement regarding economic duress is:

Larson put his home on the market for sale.His good friend Bill came to look at the home for possible purchase or rental.Bill noticed a crack in the ceiling and inquired about it to Larson.Larson said that there had been a water leakage problem in the area but it had been fixed two years ago and had not leaked since.Bill made a written offer on the house which was accepted in writing by Larson the next day.On the day prior to closing,Bill went to make a final inspection.Bill observed water leaking through another crack in a ceiling of the house and in the garage.The next day,Bill informed the real estate agent that he was rescinding the contract because of the leaks.Larson subsequently rented the property to another party.A couple of months later,Larson filed a suit seeking a court order to make Bill purchase the house or in the alternative for money damages.Bill defended by claiming that Larson either defrauded him or there was a mutual mistake and asked for the return of his earnest money and/or damages for fraud.The trial court found there was no evidence to find fraud on the part of Larson because the roof had been previously fixed and the two parties had been good friends.What is the appropriate remedy when a court concludes that there has been a mutual mistake of material fact?

Ryan,a minor,contracted to sell his auto to Ed,a 28-year-old.Ryan later refused to complete the sale.If Ed sues to enforce the contract,Ed will:

Pushy Pat,a persuasive salesman,talked Nice Nancy into purchasing something she didn't really need or want.Nice Nancy may rescind the contract because of undue influence.

Which of the following is most likely to constitute fraud?

Fraudulent,but not innocent,misrepresentation permits the injured party to rescind a contract.

Marty,a 16-year-old,contracts with Cream-of-the-Crop Cycles to buy an $8,000 motorcycle.Marty agrees to make monthly payments until the purchase price plus interest are paid in full.Which of the following is correct?

Roger,a minor,buys a stereo from Tuneland,Inc.Roger uses the stereo for a few months,returns it to Tuneland,and demands his money back.In a majority of states,Roger may return the stereo and he does not have to pay for the use of the stereo or the damages.

Mentally infirmed Sasha contracts to purchase a piano for $2,500 in 60 monthly installment payments.Six months later she tries to void the contract on grounds of mental impairment.A court will: