Question 1

If Jane persuades Linda to buy her horse by telling Linda that the horse runs "like the wind," then Jane's statement is

Accepted Answer

A) fraud. 
B) reckless misrepresentation. 
C) a unilateral mistake. 
D) puffery. 
A) fraud. 
B) reckless misrepresentation. 
C) a unilateral mistake. 
D) puffery. D

Question 2

Courts will not allow the rescission of a contract due to a unilateral mistake.

Accepted Answer

A) True 
 B)False  False

Question 3

In contract law,capacity is best defined as

Accepted Answer

A) a benefit which must be bargained for between the parties. 
B) one person's compliance with the offer made by another. 
C) a promise in exchange for performance by another party. 
D) the legal ability of a party to enter into a contract. 
A) a benefit which must be bargained for between the parties. 
B) one person's compliance with the offer made by another. 
C) a promise in exchange for performance by another party. 
D) the legal ability of a party to enter into a contract. D

Question 4

If a salesperson says,"This is a great car and it's really fun to drive," but the car turns out to be a lemon,the salesperson has committed fraud.

Accepted Answer

A) True 
 B)False

Question 5

Vince has begun forgetting things and is becoming very difficult to get along with.He is 85,has been ill,and is very fond of his housekeeper Annie.He gives a deed to Annie for all of his real property.At Vince's death,his children,who got only his photograph albums according to the will,ask that the deed be set aside and the land be put back in the estate for purposes of division among all the children.What will be the probable result in this case?

Accepted Answer

A) Since Vince was 85 he was probably incompetent and the court would rule for the children. 
B) Clearly Annie used her position of dominance to persuade Vince to deed her the property,and it will be set aside. 
C) Unless the children can prove that Vince was unable to understand what he was doing,or that Annie used her position to improperly influence Vince,Annie can keep the property. 
D) Annie will not be able to keep the property since she is not a family member. 
A) Since Vince was 85 he was probably incompetent and the court would rule for the children. 
B) Clearly Annie used her position of dominance to persuade Vince to deed her the property,and it will be set aside. 
C) Unless the children can prove that Vince was unable to understand what he was doing,or that Annie used her position to improperly influence Vince,Annie can keep the property. 
D) Annie will not be able to keep the property since she is not a family member.

Question 6

Discuss the meaning of "material fact" in fraud situations.

Accepted Answer

Fraud begins when a party to a contract

Question 7

Pamela is planning to sell her home decorating store to her daughter.Pamela has

Accepted Answer

A) a greater duty to reveal problems in the business because her daughter assumes she will be honest. 
B) no duty to disclose hidden defects in the business. 
C) a lesser duty to reveal problems in the business because she has a relationship of trust with the buyer. 
D) a duty to report only any latent defects she knows about that her daughter should not be expected to discover herself. 
A) a greater duty to reveal problems in the business because her daughter assumes she will be honest. 
B) no duty to disclose hidden defects in the business. 
C) a lesser duty to reveal problems in the business because she has a relationship of trust with the buyer. 
D) a duty to report only any latent defects she knows about that her daughter should not be expected to discover herself.

Question 8

Duress occurs when

Accepted Answer

A) the enforcement of a contract results in unconscionability. 
B) an improper threat is made to force another party to enter into a contract. 
C) both parties contract based on the same factual error. 
D) a party gives notice of refusal to be bound by an agreement. 
A) the enforcement of a contract results in unconscionability. 
B) an improper threat is made to force another party to enter into a contract. 
C) both parties contract based on the same factual error. 
D) a party gives notice of refusal to be bound by an agreement.

Question 9

Which of the following statements,if made by a seller who knows the statement to be untruthful,would NOT be misrepresentation of material fact resulting in a cause of action for fraud?

Accepted Answer

A) "This horse is only six years old." 
B) "There is no better car in the world." 
C) "The tires have less than 5,000 miles on them." 
D) "This car gets 28 miles per gallon." 
A) "This horse is only six years old." 
B) "There is no better car in the world." 
C) "The tires have less than 5,000 miles on them." 
D) "This car gets 28 miles per gallon."

Question 10

A party to a contract has a duty to investigate the other party's factual statements.

Accepted Answer

A) True 
 B)False

Question 11

Adrianna wants to purchase a ten-acre tract of land.Under what circumstances would the seller be required to divulge information Adrianna does not possess?

Accepted Answer

There used to be no duty to disclose,eve

Question 12

Which of the following is the MOST accurate statement regarding economic duress?

Accepted Answer

A) It is never grounds for rescission. 
B) It is always grounds for rescission. 
C) It is a UCC concept only. 
D) It may be grounds for rescission. 
A) It is never grounds for rescission. 
B) It is always grounds for rescission. 
C) It is a UCC concept only. 
D) It may be grounds for rescission.

Question 13

Deborah purchased a boat from Sun 'N Surf Marine.She later learned that the salesman had made misrepresentations to induce her to make the purchase.Under UCC Section 2-721,Deborah can rescind the contract

Accepted Answer

A) only if the misrepresentation was fraudulent. 
B) and sue for damages if the misrepresentation was fraudulent. 
C) but cannot sue for damages even if the misrepresentation was fraudulent. 
D) but must forego all other remedies. 
A) only if the misrepresentation was fraudulent. 
B) and sue for damages if the misrepresentation was fraudulent. 
C) but cannot sue for damages even if the misrepresentation was fraudulent. 
D) but must forego all other remedies.

Question 14

Sasha,who is mentally infirmed,contracts to purchase a piano for $2,500 in 60 monthly installment payments.Six months later she tries to void the contract on grounds of mental impairment.A court will

Accepted Answer

A) normally void the contract without requiring anything further on Sasha's part. 
B) normally void the contract but will require Sasha to return the piano. 
C) ordinarily not void the contract unless Sasha had a court-appointed guardian at the time she entered into the contract. 
D) not void the contract unless Sasha agrees to have the court appoint a guardian for her. 
A) normally void the contract without requiring anything further on Sasha's part. 
B) normally void the contract but will require Sasha to return the piano. 
C) ordinarily not void the contract unless Sasha had a court-appointed guardian at the time she entered into the contract. 
D) not void the contract unless Sasha agrees to have the court appoint a guardian for her.

Question 15

Alice offers to sell her car to Barry for $500,and Barry accepts.Alice's car has a market value of $1,000 but this fact is unknown to Alice.The contract is enforceable.

Accepted Answer

A) True 
 B)False

Question 16

A party injured by fraud generally has the choice of suing for damages or rescinding the contract.

Accepted Answer

A) True 
 B)False

Question 17

Roger,a minor,buys a stereo from Tuneland,Inc.Roger uses the stereo for a few months,returns it to Tuneland,and demands his money back.Roger may rescind the contract,return the stereo and get his money back.

Accepted Answer

A) True 
 B)False

Question 18

After her 18th birthday Lora may,by words or action,ratify a contract she made during the previous year.

Accepted Answer

A) True 
 B)False

Question 19

As it applies to minors,which of the following is LEAST likely to be regarded as a necessary?

Accepted Answer

A) rent 
B) food 
C) medical expenses 
D) educational expenses 
A) rent 
B) food 
C) medical expenses 
D) educational expenses

Question 20

Peter,a minor,purchased a car from ACME Motors.Using a fake ID,he misrepresented his age to be 18.The contract is fully executed.Which of the following is correct?

Accepted Answer

A) Peter cannot disaffirm the contract because a car is a necessary. 
B) Peter cannot disaffirm the contract because of his misrepresentation. 
C) Peter can disaffirm the contract,because a minor must be saved from his own poor judgment,including his lie. 
D) Either b or c may be applicable depending on the law of the jurisdiction in which the contract was formed. 
A) Peter cannot disaffirm the contract because a car is a necessary. 
B) Peter cannot disaffirm the contract because of his misrepresentation. 
C) Peter can disaffirm the contract,because a minor must be saved from his own poor judgment,including his lie. 
D) Either b or c may be applicable depending on the law of the jurisdiction in which the contract was formed.

Exam 15: Voidable Contracts: Capacity and Consent

If Jane persuades Linda to buy her horse by telling Linda that the horse runs "like the wind," then Jane's statement is

Courts will not allow the rescission of a contract due to a unilateral mistake.

In contract law,capacity is best defined as

If a salesperson says,"This is a great car and it's really fun to drive," but the car turns out to be a lemon,the salesperson has committed fraud.

Discuss the meaning of "material fact" in fraud situations.

Pamela is planning to sell her home decorating store to her daughter.Pamela has

Duress occurs when

Which of the following statements,if made by a seller who knows the statement to be untruthful,would NOT be misrepresentation of material fact resulting in a cause of action for fraud?

A party to a contract has a duty to investigate the other party's factual statements.

Adrianna wants to purchase a ten-acre tract of land.Under what circumstances would the seller be required to divulge information Adrianna does not possess?

Which of the following is the MOST accurate statement regarding economic duress?

Deborah purchased a boat from Sun 'N Surf Marine.She later learned that the salesman had made misrepresentations to induce her to make the purchase.Under UCC Section 2-721,Deborah can rescind the contract

Sasha,who is mentally infirmed,contracts to purchase a piano for $2,500 in 60 monthly installment payments.Six months later she tries to void the contract on grounds of mental impairment.A court will

Alice offers to sell her car to Barry for $500,and Barry accepts.Alice's car has a market value of $1,000 but this fact is unknown to Alice.The contract is enforceable.

A party injured by fraud generally has the choice of suing for damages or rescinding the contract.

Roger,a minor,buys a stereo from Tuneland,Inc.Roger uses the stereo for a few months,returns it to Tuneland,and demands his money back.Roger may rescind the contract,return the stereo and get his money back.

After her 18th birthday Lora may,by words or action,ratify a contract she made during the previous year.

As it applies to minors,which of the following is LEAST likely to be regarded as a necessary?

Peter,a minor,purchased a car from ACME Motors.Using a fake ID,he misrepresented his age to be 18.The contract is fully executed.Which of the following is correct?

Introduction to Law

Ethics and Corporate Social Responsibility

International Law

Common Law, Statutory Law, and Administrative Law

Constitutional Law

Dispute Resolution

Crime

Intentional Torts and Business Torts

Negligence, Strict Liability, and Product Liability

Privacy and Internet Law

Introduction to Contracts

Agreement: Offers and Acceptances

Consideration

Legality

Written Contracts

Third Parties

Contract Termination

Remedies

Practical Contracts

Introduction to Sales

Ownership, Risk and Warranties

Performance and Remedies

Secured Transactions

Creating a Negotiable Instrument

Liability for Negotiable Instruments

Accountants Liability

Agency Law

Employment and Labor Law

Employment Discrimination

Starting a Business: Llcs and Other Options

Partnerships

Life and Death of a Corporation

Management Duties

Shareholder Rights

Bankruptcy

Securities Regulation

Antitrust

Consumer Protection

Environmental Law

Intellectual Property

Real Property and Landlord Tenant Law

Personal Property and Bailment

Planning for the Future: Wills, Trusts and Insurance

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