Question 1

Mark fails to reveal a material fact in a business deal with Nancy.This constitutes fraud

Accepted Answer

A) if Mark is unaware of the fact and the failure. 
B) if the amount of consideration received is grossly inadequate. 
C) if the fact concerns a serious defect known to Mark and unlikely to be known by Nancy. 
D) under any circumstances. 
A) if Mark is unaware of the fact and the failure. 
B) if the amount of consideration received is grossly inadequate. 
C) if the fact concerns a serious defect known to Mark and unlikely to be known by Nancy. 
D) under any circumstances.

Question 2

Intent to deceive is NOT an element of fraud.

Accepted Answer

A) True 
 B)False

Question 3

Jane and Phil enter into a contract,but make a bilateral mistake.In order for the contract to be rescinded by either party,the bilateral mistake must be about a(n)

Accepted Answer

A) material fact. 
B) value. 
C) opinion. 
D) prediction. 
A) material fact. 
B) value. 
C) opinion. 
D) prediction.

Question 4

Raylene,who is Seth's guardian,convinces him to buy a certain parcel of land from Trevor at a greatly inflated price.Raylene may be liable for

Accepted Answer

A) duress. 
B) fraud. 
C) mistake. 
D) undue influence. 
A) duress. 
B) fraud. 
C) mistake. 
D) undue influence.

Question 5

Jill sells Thomas her 1996 Volvo.Jill has not driven the car for two years and is unaware that the brake cables have rusted.Thomas does not ask Jill any questions about the brakes before he buys the car.When Thomas is driving the car home,the brakes fail.Thomas

Accepted Answer

A) can rescind the contract on the ground of fraud. 
B) can rescind the contract on the ground of misrepresentation. 
C) can rescind the contract on the ground of bilateral mistake. 
D) cannot rescind the contract. 
A) can rescind the contract on the ground of fraud. 
B) can rescind the contract on the ground of misrepresentation. 
C) can rescind the contract on the ground of bilateral mistake. 
D) cannot rescind the contract.

Question 6

A unilateral mistake always gives the mistaken party a right to relief from the contract.

Accepted Answer

A) True 
 B)False

Question 7

Overestimating the value of an object is a mistake for which a court will NOT normally provide relief.

Accepted Answer

A) True 
 B)False

Question 8

Dale files a suit against Evelyn,alleging her fraud in entering into a con?tract with him.Proof of an injury is required

Accepted Answer

A) to recover damages. 
B) to rescind the contract. 
C) to undo Evelyn's influence. 
D) under no circumstances. 
A) to recover damages. 
B) to rescind the contract. 
C) to undo Evelyn's influence. 
D) under no circumstances.

Question 9

Fact Pattern 13-2 (Questions 13-14 apply)
Grover contracts to sell two tracts of land to Hank.Both parties believe that the two tracts are adjacent,but in fact they are not.Grover is still willing to sell the land,but under these circumstances the deal would adversely affect Hank.
-Refer to Fact Pattern 13-2.Because of the parties' belief about the adjacency of the property,their contract is

Accepted Answer

A) unavoidable. 
B) unconscionable. 
C) unenforceable. 
D) voidable. 
A) unavoidable. 
B) unconscionable. 
C) unenforceable. 
D) voidable.

Question 10

James is in an art gallery when Will,who has no special art expertise,points to a painting and says "That artist is so good.That piece will be worth a fortune in a few years!" James buys the painting,which does not turn out to be valuable.James tries to return the painting and recover his purchase price.A court will

Accepted Answer

A) order the art gallery to pay James the full purchase price. 
B) order Will to pay James the full purchase price. 
C) enforce the contract between James and the art gallery. 
D) enforce the contract between James and the art gallery,but order Will to pay James the full purchase price. 
A) order the art gallery to pay James the full purchase price. 
B) order Will to pay James the full purchase price. 
C) enforce the contract between James and the art gallery. 
D) enforce the contract between James and the art gallery,but order Will to pay James the full purchase price.

Question 11

Scienter exists if a party makes a statement that he or she does not be?lieve is true.

Accepted Answer

A) True 
 B)False

Question 12

July induces Kelli to enter into a contract for the purchase of a condominium about which July knowingly misrepresents its need for repair.When Kelli discovers the truth,Kelli can

Accepted Answer

A) enforce the contract and seek damages. 
B) enforce the contract but not seek damages. 
C) neither enforce the contract nor seek damages. 
D) seek damages but not enforce the contract. 
A) enforce the contract and seek damages. 
B) enforce the contract but not seek damages. 
C) neither enforce the contract nor seek damages. 
D) seek damages but not enforce the contract.

Question 13

At an auction for the first time,Max bids on an object,believing that the auctioneer requested an amount less than the price actually asked.Max is

Accepted Answer

A) liable on the bid. 
B) not liable on the bid because Max misunderstood the auctioneer. 
C) not liable on the bid because the auctioneer misstated the price. 
D) not liable on the bid because the object is probably overpriced. 
A) liable on the bid. 
B) not liable on the bid because Max misunderstood the auctioneer. 
C) not liable on the bid because the auctioneer misstated the price. 
D) not liable on the bid because the object is probably overpriced.

Question 14

Harley induces Gene to sign a contract by placing a gun to Gene's head.The contract is void

Accepted Answer

A) only if the contract has an illegal purpose. 
B) only if the terms are unfair to Gene. 
C) under any circumstances. 
D) only if the gun was loaded. 
A) only if the contract has an illegal purpose. 
B) only if the terms are unfair to Gene. 
C) under any circumstances. 
D) only if the gun was loaded.

Question 15

Often,when both parties to a contract are mistaken as to the same material fact,either party can rescind the contract.

Accepted Answer

A) True 
 B)False

Question 16

Andy knows nothing about horses.Peter,an expert horse trainer,knows that the horse has no talent and is not likely to win any competitions.Peter convinces Andy to buy a horse for $500,000 by assuring him that the horse has great talent.The horse turns out to have no talent and never wins any competitions.Andy can most likely recover damages based on

Accepted Answer

A) fraud. 
B) mistake. 
C) undue influence. 
D) duress. 
A) fraud. 
B) mistake. 
C) undue influence. 
D) duress.

Question 17

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

Accepted Answer

A) avoid the contract or choose to carry it out. 
B) do nothing once she has signed the contract. 
C) recover from her lender for a failure to influence her "due." 
D) recover from the bank for a failure to undo Lou's influence. 
A) avoid the contract or choose to carry it out. 
B) do nothing once she has signed the contract. 
C) recover from her lender for a failure to influence her "due." 
D) recover from the bank for a failure to undo Lou's influence.

Question 18

Reliance on a misrepresentation is justified if the misrepresentation is an obviously extravagant statement.

Accepted Answer

A) True 
 B)False

Question 19

Hank,a salesperson for Ideal Autos,promises Jennie a certain car will give her a "smooth ride." Hank offers a test drive,which Jennie de?clines.She buys the car but soon realizes its suspension is in poor condi?tion.Jennie

Accepted Answer

A) can rescind the contract on the ground of fraud. 
B) can rescind the contract on the ground of misrepresentation. 
C) can rescind the contract on the ground of mistake. 
D) was not defrauded. 
A) can rescind the contract on the ground of fraud. 
B) can rescind the contract on the ground of misrepresentation. 
C) can rescind the contract on the ground of mistake. 
D) was not defrauded.

Question 20

Economic need is always sufficient to constitute duress.

Accepted Answer

A) True 
 B)False

Exam 13: Mistakes and Other Contract Defects

Mark fails to reveal a material fact in a business deal with Nancy.This constitutes fraud

Intent to deceive is NOT an element of fraud.

Jane and Phil enter into a contract,but make a bilateral mistake.In order for the contract to be rescinded by either party,the bilateral mistake must be about a(n)

Raylene,who is Seth's guardian,convinces him to buy a certain parcel of land from Trevor at a greatly inflated price.Raylene may be liable for

Jill sells Thomas her 1996 Volvo.Jill has not driven the car for two years and is unaware that the brake cables have rusted.Thomas does not ask Jill any questions about the brakes before he buys the car.When Thomas is driving the car home,the brakes fail.Thomas

A unilateral mistake always gives the mistaken party a right to relief from the contract.

Overestimating the value of an object is a mistake for which a court will NOT normally provide relief.

Dale files a suit against Evelyn,alleging her fraud in entering into a con?tract with him.Proof of an injury is required

Scienter exists if a party makes a statement that he or she does not be?lieve is true.

July induces Kelli to enter into a contract for the purchase of a condominium about which July knowingly misrepresents its need for repair.When Kelli discovers the truth,Kelli can

At an auction for the first time,Max bids on an object,believing that the auctioneer requested an amount less than the price actually asked.Max is

Harley induces Gene to sign a contract by placing a gun to Gene's head.The contract is void

Often,when both parties to a contract are mistaken as to the same material fact,either party can rescind the contract.

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

Reliance on a misrepresentation is justified if the misrepresentation is an obviously extravagant statement.

Hank,a salesperson for Ideal Autos,promises Jennie a certain car will give her a "smooth ride." Hank offers a test drive,which Jennie de?clines.She buys the car but soon realizes its suspension is in poor condi?tion.Jennie

Economic need is always sufficient to constitute duress.

Introduction to the Law and Our Legal System

Ethics in Business

The Courts and Alternative Dispute Resolution

Constitutional Law

Torts and Cyber Torts

Intellectual Property and Internet Law

Criminal Law and Cyber Crime

Introduction to Contracts

Offer and Acceptance

Consideration

Capacity

The Legality of Agreements

Written Contracts

Third Party Rights

Contract Discharge and Remedies

E-Contracts

Introduction to Sales and Lease Contracts

Title and Risk of Loss

Performance and Breach

Warranties and Product Liability

Consumer Protection

The Essentials of Negotiability

Transferability and Liability

Checks and Banking in the Digital Age

Agency

Employment and Immigration Law

Discrimination and Labor Law

Sole Proprietorships,partnerships, Limited

Formation and Termination of a Corporation

Management and Ownership of a Corporation

Secured Transactions

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