Question 1

Misrepresentation of a material fact is an element of fraud.

Accepted Answer

A) True 
 B)False  True

Question 2

Dumont threatens physical harm to force Eddie to sell his business,Citywide Vending,Inc.,to Dumont for a below-market price. This is

Accepted Answer

A) duress. 
B) fraud. 
C) unconscionability. 
D) undue influence. 
A) duress. 
B) fraud. 
C) unconscionability. 
D) undue influence. A

Question 3

County Title Company processes information furnished by others to transfer title to real estate from a seller to a buyer. In performing this task for a sale of land from James to Kate,the furnished information is mistaken.
-Refer to Fact Pattern 14-3. The contract between James and Kate that includes the mistake may be rescinded

Accepted Answer

A) if the mistake concerns a basic assumption on which the contract was made. 
B) if the mistake concerns a term in the contract that is subject to only one reasonable interpretation. 
C) if the mistake represents a true "meeting of the minds." 
D) under no circumstances. 
A) if the mistake concerns a basic assumption on which the contract was made. 
B) if the mistake concerns a term in the contract that is subject to only one reasonable interpretation. 
C) if the mistake represents a true "meeting of the minds." 
D) under no circumstances. A

Question 4

Raylene,who is Seth's guardian,convinces him to buy a certain parcel of land from Trevor at a greatly inflated price. Raylene may be liable for

Accepted Answer

A) duress. 
B) fraud. 
C) mistake. 
D) undue influence. 
A) duress. 
B) fraud. 
C) mistake. 
D) undue influence.

Question 5

Scienterclearly exists if a party knows a fact is not as stated.

Accepted Answer

A) True 
 B)False

Question 6

Health Source,Inc.,offers to buy Medico Equipment & Supplies Corporation. On June 1,Medico gives Health Source copies of Medico's financial statements for the pre-vious year. The statements show an inventory of $10 million. On June 15,Medico discovers that the previous year's inventory is overstated by $500,000,but does not inform Health Source. On July 1,Health Source,relying on the fi-nancial statements,buys Medico. On July 10,Health Source discovers the inven-tory over-statement. Can Health Source succeed in a suit against Medico? On what basis?

Accepted Answer

Yes,Health Source can succeed in a suit

Question 7

Digital Storage,Inc.,offers to sell provide cloud-computing services to Entrepreneur Enterprises,Inc.,but mistakenly transposes some of the digits in the price so that $15,400 appears in the offer as $14,500. Entrepreneur Enterprisesaccepts the written offer.
-Refer to Fact Pattern 14-1. Digital Storage'sbest defense against enforcement of the contract is that Entrepreneur Enterprisesknew

Accepted Answer

A) a bilateral mistake supports the cancellation of a contract. 
B) a mistake of value supports the cancellation of a contract. 
C) a unilateral mistake supports the cancellation of a contract. 
D) the price was below the prices of comparable devices. 
A) a bilateral mistake supports the cancellation of a contract. 
B) a mistake of value supports the cancellation of a contract. 
C) a unilateral mistake supports the cancellation of a contract. 
D) the price was below the prices of comparable devices.

Question 8

When both parties to a contract are mistaken about the same material fact,the contract cannot be rescinded.

Accepted Answer

A) True 
 B)False

Question 9

Creighton applies to BigData Corporation for a position as a software engineer. Creighton has no training in computers or programming and no background as an engineer. After Creighton is hired,BigData learns the truth. BigData can

Accepted Answer

A) not rescind the contract. 
B) rescind the contract on the basis of fraud. 
C) rescind the contract on the basis of mistake. 
D) rescind the contract on the basis of unconscionability. 
A) not rescind the contract. 
B) rescind the contract on the basis of fraud. 
C) rescind the contract on the basis of mistake. 
D) rescind the contract on the basis of unconscionability.

Question 10

When the dominant party in a fiduciary relationship benefits from that relationship,a presumption of undue influence arises.

Accepted Answer

A) True 
 B)False

Question 11

For a party to a contract to receive relief from either a unilateral or a bilateral mistake,the mistake must involve a material fact.

Accepted Answer

A) True 
 B)False

Question 12

Winona enters into a contract with Peyton to buy Peyton's land based on Peyton's assertion that the land is legally open to development. After the sale,Winona learns what Peyton knew previously-only a small section of the land can be built on. A local law prohibits construction on the rest of the property. Winona can

Accepted Answer

A) not avoid the contract because persons are assumed to know the law. 
B) avoid the contract due to a mutual mistake. 
C) avoid the contract due to a mistake in value. 
D) avoid the contract due to fraud. 
A) not avoid the contract because persons are assumed to know the law. 
B) avoid the contract due to a mutual mistake. 
C) avoid the contract due to a mistake in value. 
D) avoid the contract due to fraud.

Question 13

Courts typically set aside contracts because a party did not volunteer pertinent information.

Accepted Answer

A) True 
 B)False

Question 14

Misrepresentation of law ordinarily entitles a party to relief from a contract.

Accepted Answer

A) True 
 B)False

Question 15

Dixon agrees to sell to Elmore,for $1,500,a remote parcel of land. They believe the land to be worthless,but beneath it is a shale rock containing oil. A court would

Accepted Answer

A) not rescind the contract. 
B) rescind the contract on the basis of fraud. 
C) rescind the contract on the basis of mistake. 
D) rescind the contract on the basis of undue influence. 
A) not rescind the contract. 
B) rescind the contract on the basis of fraud. 
C) rescind the contract on the basis of mistake. 
D) rescind the contract on the basis of undue influence.

Question 16

Voluntary consent may be lacking because of misrepresentation but not because of a mistake.

Accepted Answer

A) True 
 B)False

Question 17

Kari,a real estate agent,assures Linc that a certain parcel of commercial property fronts on the most highly trafficked street in Metro City. Linc buys the property and then discovers that the street has no more traffic than any other in its vicinity. Linc is most likely a victim of

Accepted Answer

A) opinion. 
B) fraud. 
C) mistake. 
D) nothing. 
A) opinion. 
B) fraud. 
C) mistake. 
D) nothing.

Question 18

Garth owns two all-terrain vehicles (ATVs),worth $1,000 and $500,re-spec-tively. Helen agrees to buy "Garth's ATV" for $750. Garth believes,in good faith,that he is selling the $500 ATV. Helen believes,in good faith,that she is buying the $1,000 ATV. In this situation

Accepted Answer

A) Garth is entitled to $750 for the $500 ATV. 
B) Helen is entitled to the $1,000 ATV for $750. 
C) Helen must buy both ATVs for $1,500. 
D) there is no contract. 
A) Garth is entitled to $750 for the $500 ATV. 
B) Helen is entitled to the $1,000 ATV for $750. 
C) Helen must buy both ATVs for $1,500. 
D) there is no contract.

Question 19

In selling a commercial building,Birdie tells Colt that theproperty has a certain capacity,making it suitable for a nightclub. Birdie knows nothing about the capacity of the building,but it is not as she specifies. Colt buys the building.
-Refer to Fact Pattern 14-4. Under these circumstances,Colt's best course of action is most likely to

Accepted Answer

A) scam Birdie. 
B) induce Birdie to give him the commission on her next sale. 
C) recover damages or rescind the contract to buy the building. 
D) sabotage Birdie's career with bad publicity. 
A) scam Birdie. 
B) induce Birdie to give him the commission on her next sale. 
C) recover damages or rescind the contract to buy the building. 
D) sabotage Birdie's career with bad publicity.

Question 20

Drake enters into a contract with Eve,who claims to have access to a stock-trading algorithm that will multiply an investment many times over. When the results do not match this promise,Drake learns that Eve does not have access to any unique software and files a suit against her,alleging fraud. Proof of an injury is required to

Accepted Answer

A) recover damages. 
B) rescind the contract. 
C) undo Eve's influence. 
D) punish the defendant. 
A) recover damages. 
B) rescind the contract. 
C) undo Eve's influence. 
D) punish the defendant.

Exam 14: Voluntary Consent

Misrepresentation of a material fact is an element of fraud.

Dumont threatens physical harm to force Eddie to sell his business,Citywide Vending,Inc.,to Dumont for a below-market price. This is

Raylene,who is Seth's guardian,convinces him to buy a certain parcel of land from Trevor at a greatly inflated price. Raylene may be liable for

Scienterclearly exists if a party knows a fact is not as stated.

When both parties to a contract are mistaken about the same material fact,the contract cannot be rescinded.

Creighton applies to BigData Corporation for a position as a software engineer. Creighton has no training in computers or programming and no background as an engineer. After Creighton is hired,BigData learns the truth. BigData can

When the dominant party in a fiduciary relationship benefits from that relationship,a presumption of undue influence arises.

For a party to a contract to receive relief from either a unilateral or a bilateral mistake,the mistake must involve a material fact.

Courts typically set aside contracts because a party did not volunteer pertinent information.

Misrepresentation of law ordinarily entitles a party to relief from a contract.

Dixon agrees to sell to Elmore,for $1,500,a remote parcel of land. They believe the land to be worthless,but beneath it is a shale rock containing oil. A court would

Voluntary consent may be lacking because of misrepresentation but not because of a mistake.

Kari,a real estate agent,assures Linc that a certain parcel of commercial property fronts on the most highly trafficked street in Metro City. Linc buys the property and then discovers that the street has no more traffic than any other in its vicinity. Linc is most likely a victim of

Garth owns two all-terrain vehicles (ATVs),worth $1,000 and $500,re-spec-tively. Helen agrees to buy "Garth's ATV" for $750. Garth believes,in good faith,that he is selling the $500 ATV. Helen believes,in good faith,that she is buying the $1,000 ATV. In this situation

The Legal Environment

Constitutional Law

Courts and Alternative Dispute Resolution

Tort Law

Product Liability

Intellectual Property Rights

Internet Law, social Media, and Privacy

Criminal Law and Cyber Crime

Business Ethics

Nature and Classification

Agreement

Consideration

Capacity and Legality

The Statute of Fraudswriting Requirement

Performance and Discharge

Breach and Remedies

Third Party Rights

International Law in a Global Economy

The Formation of Sales and Lease Contracts

Title and Risk of Loss

Performance and Breach of Sales and Lease Contracts

Negotiable Instruments

Banking in the Digital Age

Security Interests and Creditors Rights

Bankruptcy

Agency Relationships in Business

Employment, immigration, and Labor Law

Employment Discrimination

Sole Proprietorships and Franchises

All Forms of Partnership

Limited Liability Companies and Special Business Forms

Corporate Formation and Financing

Corporate Directors, officers, and Shareholders

Corporate Mergers, takeovers, and Termination

Investor Protection, insider Trading, and Corporate Governance

Administrative Law

Antitrust Law and Promoting Competition

Consumer and Environmental Law

Liability of Accountants and Other Professionals

Personal Property and Bailments

Real Property and Landlord-Tenant Law

Insurance, wills, and Trusts

Filters