Exam 11: Conduct Invalidating Assent

The test for duress is objective and the act constituting duress must be a tort or a crime in order to be wrongful.

A fiduciary:

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

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

There are two distinct types of fraud.

A contract was made for 125 bales of cotton to arrive on a ship named "Peerless" from Bombay.Unbeknownst to either party to the contract, there were two ships named "Peerless," both of which were sailing from Bombay.One sailed in October and the other in December.The buyer had in mind the ship sailing in October, but the seller had in mind the ship sailing in December.Each party held his belief in good faith.When the goods failed to arrive on time, the buyer sued for breach of contract.In this case:

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

A fraudulent misrepresentation:

Sam wants to sell his Golden Retriever to Al.Sam tells Al that the dog is three years old and that he will point, back, and retrieve.Although the dog is three years old and will point at birds, he will not back (honor another dog's point).Al relies on these statements and purchases the bird dog.The buyer has probably been a victim of:

Today, a majority of courts permit a rescission of a contract for negligent or innocent misrepresentation, provided that all the remaining elements of fraud are present and the misrepresentation is material.

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

Adam wants to buy a six-passenger car.The salesman tells him that the two-seat sports car Adam sees on the car lot would be just perfect for six people.Adam test drives the car and then buys it.In this case:

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

Nonfraudulent representation is made without scienter.

The law requires that to form a valid contract the agreement must be voluntary and knowing.

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

An arm's length transaction is one in which the parties owe each other special duties.

When both parties are mistaken as to the same set of facts, it is termed:

Harry was told that he had to pay $50 for filing his claim in small claims court.He did.If the fee is really $40, he cannot recover the $10 because it is a unilateral mistake of fact.

Pat told her friends that her car got 35 miles to the gallon in the city when in reality it only got 20 miles per gallon.If Pat decides to sell the car and one of these friends decides to buy it, Pat is under no duty to tell the correct figure unless asked.