Exam 11: Defenses to Contract Enforceability

An oral contract may be enforceable if the person making the promise could foresee that the promisee would rely on the promise.

An innocent party may neverrescind a fraudulent con-tract.

Barb,a real estate agent,is showing John a house.She tells him that this is a house where "his family can live happily ever after." John buys the house,but his wife does not like it.John

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

Chloe files a suit against Digital Associates,Inc.(DAI),to enforce a con-tract.The only written evidence of the contract is a memo on DAI's let-terhead as signed by a DAI officer in its files.The con-tract can be en-forced if the memo includes

Atlantic Applications,Inc.,and Pacific Resale Company (PRC) enter into an oral contract for Atlantic's sale to PRC of six used forklifts for $1,900 each.Before PRC takes posses-sion of the items,this contract is enforce-able by

A false statement by an expert to a naive buyer usually will entitle the buyer to rescind or reform a contract.

Pete,an accountant,convinces his client Kasey to invest her savings in a nonexistent social-networking Web site.When Kasey learns the truth,she can

Wilma,who lives in New York,enters into a contract to buy a painting from Fred,who lives in France.The contract includes all the costs of insuring and shipping the painting from France to New York.The agent that made the shipping estimate makes a mistake when adding up the costs and,as a result,the shipping cost listed in the contract is $1,000 less than the shipping actually costs.A court will most likely

Brenda induces Carmen to enter into a contract for the sale of a gas station and convenience store.Brenda tells Carmen that she is the sole owner,but their signed,written contract lists Brenda's parents as co-owners.The parol evidence rule governs

Marta buys a candy bar for $5 and signs a contract for delivery of fresh flowers to her mother's nursing home every week for the rest of her mother's life.She then enters into a contract to assume George's debt to FastCars Dealership.Marta receives no personal benefit from assuming George's debt.The Statute of Frauds covers

Fiona and Dora enter into an oral contract under which Fiona agrees to work on Dora's farm for not less than one week.This contract is enforce-able by

Duress is a defense to the enforcement of a contract,but not a ground for rescission of a contract.

Scienter exists if

Selena buys a cell phone for $350 and an air hockey table for $1,500,and signs a one-year employment contract for a $4,000 monthly salary to start at the beginning of the next month.The Statute of Frauds covers

Big Dog Security Service,Inc.orally agrees to provide security services for NorthGate Mall for as long as NorthGate Mall requires them.This contract is enforceable by

Multi Investments,Inc.,offers to buy Nano Toy Corporation.On May 1,Nano provides copies of its financial statements for the pre-vious year,showing an inventory of $10 million.On May 15,Nano discovers that the previous year's inventory is overstated by $5 million,but does not inform Multi.On June 1,Multi,relying on the fi-nancial statements,buys Nano.On June 10,the buyer discovers the inven-tory over-statement.Can Multi succeed in a suit against Nano for fraud?

A party's oral agreement to pay another's debt is NOT enforceable if the party's main purpose is to derive a benefit for himself or herself.

Lou uses undue influence to induce Mona to sign a contract to invest her student loan funds in National Overseas Bank.Mona may

Beau sells a car to Cody without disclosing that the odometer,which reads 40,000 miles,was disconnected 80,000 miles ago.Beau is liable for