Exam 11: Conduct Invalidating Assent

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.

An act that is not wrongful or unfair may constitute duress.

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:

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 $30,000.Steve made no attempt to verify the statements until after the transaction was completed.In this case:

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

Attorney Geraldine advises her client,Rick,to enter a contract,which ultimately would have benefited Geraldine but not Rick.The test of whether the contract,if entered,is voidable based on undue influence is whether Geraldine's advice would have dominated the thinking of an ordinary,reasonable person rather than whether it dominated Rick's mind or emotions.

Undue influence is the taking of unfair advantage of a person by reason of a dominant position based upon a confidential relationship.

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

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

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?

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

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.The court found:

Acts constituting duress are necessarily crimes or torts in themselves.

Marjorie has been cared for by her family physician for 35 years.She decides to assume the mortgage on his new clinic.The contract is automatically invalid because of undue influence.

Tom tries to sell his Aston-Martin 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?

Scienter is the element of fraud that requires that the misrepresentation must have been known by the one making it to be false and must have been made with an intent to deceive.

In the Berardi v.Meadowbrook Mall Company case,the court found:

Physical compulsion and improper threats are the two basic types of duress.

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.

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