Exam 11: Conduct Invalidating Assent

Which of the following is not a requisite for fraud in the inducement?

Which of the following need NOT be proved in order to establish the defense of economic duress?

For a misrepresentation to be actionable as fraud in the inducement, it must be a misrepresentation of opinion.

If incorrect, which of the following would probably be considered a misrepresentation of a material fact?

Fred is a concert violinist who is scheduled to perform at Carnegie Hall for the first time. He buys what he is told is a Stradivarius violin from a well-known, reputable dealer in quality violins, and he pays the going rate for a Stradivarius. He later learns the violin is an imitation, although it is a good imitation, which fooled even the dealer. In this case:

Marjorie has been cared for by her family physician for 35 years. She decides to assume the mortgage on his new clinic. The contract is automatically invalid because of undue influence.

A famous decision involving mistake in the meaning of contractual terms is Raffles v. Wichelhaus , a case involving two ships with the same name which were confused by the two parties. Neither party was at fault, and the court held that no contract existed.

Identify two situations in which silence or nondisclosure constitutes a misrepresentation.

An arm's-length transaction is one in which:

The law would most likely impose a duty of disclosure in a transaction between:

Ben and Kate had been negotiating Ben's employment contract in conversations over the phone for a couple of weeks. Finally, they agreed on some contract terms. Kate offered to create a draft of the contract for Ben to read over. On the same day Ben was fired from his job. Afraid he would be unemployed, Ben signed Kate's draft without reading it. In this example Ben:

Hal holds a gun to Irving's head and tells him to sign the contract. Irving signs the contract. The contract is void only if it is not beneficial to Irving.

Identify whether the following statements could result in actionable fraud and why or why not. a. A statement by an art dealer to a potential buyer, "I think this painting is underpriced because the artist is now gaining national recognition." b. A vacuum cleaner salesperson's statement, "This machine is the best available for the cost." c. A city councilman's statement to a fellow councilman that, "If we vote for that action, the resulting consolidation will be illegal."

Predictions, opinions, and promissory statements ordinarily do not constitute bases of fraud.

Under the Restatement, if the parties to a contract attach materially different meanings to their manifestations and neither party knows or has reason to know the meaning attached by the other:

A voidable contract results when the contract arises from:

An arm's length transaction is one in which the parties owe each other no special duties and each is acting in his or her self-interest.

An act that is contrary to public policy or is morally reprehensible may constitute duress.

Albert found a stone in his yard and took it to Bob, a jeweler, for evaluation. Bob wasn't sure as to the nature of the stone, but told Albert he thought it was a topaz. Bob then offered to buy the stone for $25 and Albert agreed. Later Albert found out the stone was an uncut diamond worth about $700. The sales contract:

Jill contracts to purchase Kevin's automobile under the belief that she can sell it at a profit to Linda, but after Jill has bought the car, she finds out that Linda isn't interested in buying it. Jill: