Question 1

A basic element of fraud is a false representation or a misrepresentation.

Accepted Answer

A) True 
 B)False  True

Question 2

Steven has a typed copy of a contract, which he would like to have Thomas sign. Thomas, who needs glasses to read typing, doesn't want to sign until he has read the document, but Steven convinces Thomas to sign it anyway, because it is a "standard" contract for this type of situation. Is the contract which Thomas signed binding upon him?

Accepted Answer

A)  No, because he did not read it. 
B)  No, because he entered into it based upon fraud in the execution. 
C)  Yes, because he has made a unilateral mistake of law. 
D)  Yes, because he was negligent in not ascertaining its contents. 
A)  No, because he did not read it. 
B)  No, because he entered into it based upon fraud in the execution. 
C)  Yes, because he has made a unilateral mistake of law. 
D)  Yes, because he was negligent in not ascertaining its contents. D

Question 3

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

Accepted Answer

A) True 
 B)False  False

Question 4

The law will carefully scrutinize contracts between Pete, a trustee, and Mason, a beneficiary of the trust, to make sure there was no undue influence by Pete.

Accepted Answer

A) True 
 B)False

Question 5

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.

Accepted Answer

A) True 
 B)False

Question 6

Give an example of each of the following: 
a. Unilateral mistake 
b. Mistake in the meaning of a contract term.

Accepted Answer

a. Nancy offers to sell Sidney a certain

Question 7

Which of the following would be considered to be a misrepresentation of a material fact for purposes of establishing fraud in the inducement?

Accepted Answer

A)  A statement of value, such as "This is the best car in town for the money." 
B)  "This style of jacket is going to be the most popular style next year." 
C)  "This car has a new radiator." 
D)  "In my opinion, this is the best buy for the money." 
A)  A statement of value, such as "This is the best car in town for the money." 
B)  "This style of jacket is going to be the most popular style next year." 
C)  "This car has a new radiator." 
D)  "In my opinion, this is the best buy for the money."

Question 8

Al owns a farm that he believes is worth $150,000. Betty knows that there is oil under the farm and offers Al $160,000 for it. Al is suspicious and asks her why she wants to buy the place. She says she would like to live in the country. Al then asks her if she thinks there might be valuable minerals under the land. Betty laughs and says she doubts that very much, so Al sells her the farm for $160,000. Al later realizes that the land was worth more than he was paid. Al can have the contract voided based upon fraud.

Accepted Answer

A) True 
 B)False

Question 9

Acts constituting duress are necessarily crimes or torts in themselves.

Accepted Answer

A) True 
 B)False

Question 10

Scienter is a legal term which means:

Accepted Answer

A)  that a buyer has justifiably relied upon the seller's representation. 
B)  that the seller had knowledge that his statements were false and the statements were made with the intention to deceive. 
C)  sales puffery. 
D)  All of these. 
A)  that a buyer has justifiably relied upon the seller's representation. 
B)  that the seller had knowledge that his statements were false and the statements were made with the intention to deceive. 
C)  sales puffery. 
D)  All of these.

Question 11

Fraud in the execution is a fairly common occurrence and involves defrauding a person as to the very nature of the contract.

Accepted Answer

A) True 
 B)False

Question 12

To sustain a case of fraud in the inducement, the injured party must prove that he actually relied upon the false representation.

Accepted Answer

A) True 
 B)False

Question 13

Contracts induced by threats of __________ are voidable, regardless of whether the coerced party has committed an unlawful act.

Accepted Answer

A)  civil prosecution 
B)  criminal prosecution 
C)  tortious conduct 
D)  a lawsuit to recover a debt 
A)  civil prosecution 
B)  criminal prosecution 
C)  tortious conduct 
D)  a lawsuit to recover a debt

Question 14

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:

Accepted Answer

A)  can avoid the contract because of mistake by failure to read. 
B)  can avoid the contract because he was the victim of economic duress. 
C)  cannot avoid the contract because of economic duress or failure to read. 
D)  may rescind the contract because of unilateral mistake. 
A)  can avoid the contract because of mistake by failure to read. 
B)  can avoid the contract because he was the victim of economic duress. 
C)  cannot avoid the contract because of economic duress or failure to read. 
D)  may rescind the contract because of unilateral mistake.

Question 15

The remedies of damages and rescission are available for:

Accepted Answer

A)  material fraudulent misrepresentation. 
B)  negligent misrepresentation. 
C)  innocent misrepresentation 
D)  All of these . 
A)  material fraudulent misrepresentation. 
B)  negligent misrepresentation. 
C)  innocent misrepresentation 
D)  All of these .

Question 16

By holding a knife to his back, Ed compelled Sean to sign a contract advantageous to Ed. This contract was entered under:

Accepted Answer

A)  physical duress. 
B)  improper threats. 
C)  undue influence. 
D)  false representation. 
A)  physical duress. 
B)  improper threats. 
C)  undue influence. 
D)  false representation.

Question 17

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

Accepted Answer

Students may identify two of the followi

Question 18

Undue influence is the taking of unfair advantage of a person by reason of a dominant position based upon a confidential relationship.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A)  That one side involuntarily accepted the terms of another. 
B)  That circumstances permitted no other alternative. 
C)  That one party explicitly made the economic threat. 
D)  That the circumstances leading up to the contract were the result of coercive acts of the opposite party. 
A)  That one side involuntarily accepted the terms of another. 
B)  That circumstances permitted no other alternative. 
C)  That one party explicitly made the economic threat. 
D)  That the circumstances leading up to the contract were the result of coercive acts of the opposite party.

Question 20

A contract induced by threatening to bring a civil suit against an individual is prohibited:

Accepted Answer

A)  if the threat is an abuse of process. 
B)  if the suit is to recover a debt, whether the debt is valid or in controversy. 
C)  under no circumstances. 
D)  Two answers are correct. 
A)  if the threat is an abuse of process. 
B)  if the suit is to recover a debt, whether the debt is valid or in controversy. 
C)  under no circumstances. 
D)  Two answers are correct.

Exam 11: Conduct Invalidating Assent

A basic element of fraud is a false representation or a misrepresentation.

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

The law will carefully scrutinize contracts between Pete, a trustee, and Mason, a beneficiary of the trust, to make sure there was no undue influence by Pete.

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.

Give an example of each of the following: a. Unilateral mistake b. Mistake in the meaning of a contract term.

Which of the following would be considered to be a misrepresentation of a material fact for purposes of establishing fraud in the inducement?

Acts constituting duress are necessarily crimes or torts in themselves.

Scienter is a legal term which means:

Fraud in the execution is a fairly common occurrence and involves defrauding a person as to the very nature of the contract.

To sustain a case of fraud in the inducement, the injured party must prove that he actually relied upon the false representation.

Contracts induced by threats of __________ are voidable, regardless of whether the coerced party has committed an unlawful act.

The remedies of damages and rescission are available for:

By holding a knife to his back, Ed compelled Sean to sign a contract advantageous to Ed. This contract was entered under:

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

Undue influence is the taking of unfair advantage of a person by reason of a dominant position based upon a confidential relationship.

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

A contract induced by threatening to bring a civil suit against an individual is prohibited:

Introduction to Law

Business Ethics

Civil Dispute Resolution

Constitutional Law

Administrative Law

Criminal Law

Intentional Torts

Negligence and Strict Liability

Introduction to Contracts

Mutual Assent

Consideration

Illegal Bargains

Contractual Capacity

Contracts in Writing

Third Parties to Contracts

Performance, Breach, and Discharge

Contract Remedies

Introduction to Sales and Leases

Performance

Transfer of Title and Risk of Loss

Product Liability: Warranties and Strict Liability

Sales Remedies

Form and Content

Transfer and Holder in Due Course

Liability of Parties

Bank Deposits, Collections, and Funds Transfers

Relationship of Principal and Agent

Relationship With Third Parties

Formation and Internal Relations of General Partnerships

Operation and Dissolution of General Partnerships

Limited Partnerships and Limited Liability Companies

Nature and Formation of Corporations

Financial Structure of Corporations

Management Structure of Corporations

Fundamental Changes of Corporations

Secured Transactions and Suretyship

Bankruptcy

Securities Regulation

Intellectual Property

Employment Law

Antitrust

Accountants Legal Liability

Consumer Protection

Environmental Law

International Business Law

Introduction to Property, Property Insurance, Bailments, and Documents of Title

Interests in Real Property

Transfer and Control of Real Property

Trusts and Wills

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