Exam 11: Conduct Invalidating Assent

In the Lesher v.Strid case, the court held that:

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 intentional misrepresentation of a material fact made with knowledge of the falsity and intention to deceive and which a party justifiably relies upon to his detriment is known as:

If the act or threat would affect a person of average strength and intelligence, then and only then will the act constitute duress.

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

Define and discuss the concept of materiality in relation to misrepresentation

Scienter is the element of fraud that requires that the misrepresentation must have been known by the one making it to be false, although it need not have been made with an intent to deceive.

James threatens to hit Kenneth in the head with a baseball bat unless Kenneth signs a contract agreeing to pay James $400 for his saw.If, because of the threat, Kenneth signs the contract:

Ty threatened to have Lisa's father prosecuted for embezzlement unless Lisa signed a contract to pay Ty 12 monthly payments of $500 each to purchase his car.Lisa cannot avoid the contract based on duress since the threat was toward Lisa's father rather than Lisa herself.

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?

Which of the following, if any, are requisites for fraud in the inducement?

Ralph sold a motel to Steve by stating that he had paid $250,000 for it and that his net average annual profit from the business has been $40,000.In reality he paid $100,000 for the motel and has earned a net average annual profit of only $28,000.Steve made no attempt to verify the statements until after the transaction was completed.In this case:

Relationships that may lead to a court's careful scrutinization of contracts between the parties to make sure undue influence was not present include all but:

Tom tries to sell his classic car to Victoria for $12,000.Tom tells Victoria, "I paid $12,000 for the car in 1978 and it's worth twice that today." Tom really paid $8,000 for the car in 1978.If Victoria buys the car, basing her decision on Tom's statement, which of the following correctly states the situation?

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

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

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 accepts and sells the farm to Betty.Al later realizes that the land was worth more than $160,000.Al can have the contract avoided based upon fraud.

Define undue influence and name some of the relationships that would be affected.

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.

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