Question 1

A contract is sometimes voidable if one party is aware that the other party made a mistake of fact.

Accepted Answer

A) True 
 B)False

Question 2

For a party to a contract to receive relief from either a unilateral or a bilateral mistake,the mistake must involve a material fact.

Accepted Answer

A) True 
 B)False

Question 3

Dina,an employee of Excavation Associates,is injured in a work-related acci?dent.Based on the diagnosis of Filbert,a doctor,Dina accepts $50,000 from her employer and waives the right to future claims.Filbert's diagnosis later proves to have been wrong.This misdiagnosis is,in terms of its im?pact on Dina's agreement with her employer,

Accepted Answer

A) a bilateral mistake of fact. 
B) a unilateral mistake of fact. 
C) fraudulent misrepresentation. 
D) nonfraudulent misrepresentation. 
A) a bilateral mistake of fact. 
B) a unilateral mistake of fact. 
C) fraudulent misrepresentation. 
D) nonfraudulent misrepresentation.

Question 4

The identity of one of the parties to a contract is an example of a material fact.

Accepted Answer

A) True 
 B)False

Question 5

An innocent party can sometimes enforce a fraudulent con?tract.

Accepted Answer

A) True 
 B)False

Question 6

Used Car Lot's salesperson Vic offers to sell Will,who is twenty years of age,a car about which Vic intentionally misrepresents its past use and repairs.In reliance on the misrepresentations,Will buys the car.To prove fraud in this transaction,Will does not have to show that

Accepted Answer

A) Vic intentionally deceived Will. 
B) Vic misrepresented several material facts. 
C) Will is under twenty-one years of age. 
D) Will justifiably relied on Vic's misrepresentations. 
A) Vic intentionally deceived Will. 
B) Vic misrepresented several material facts. 
C) Will is under twenty-one years of age. 
D) Will justifiably relied on Vic's misrepresentations.

Question 7

Wilma,who lives in New York,enters into a contract to buy a painting from Fred,who lives in France.The contract includes all the costs of insuring and shipping the painting from France to New York.The agent that made the shipping estimate make a mistake when adding up the costs and,as a result,the shipping cost listed in the contract is $1,000 less than the shipping actually costs.A court will most likely

Accepted Answer

A) allow the parties to rescind the contract. 
B) award damages to Wilma for the mistakes. 
C) award damages to Fred for the mistakes. 
D) enforce the contract without requiring changes. 
A) allow the parties to rescind the contract. 
B) award damages to Wilma for the mistakes. 
C) award damages to Fred for the mistakes. 
D) enforce the contract without requiring changes.

Question 8

The presence of fraud does NOT affect the authenticity of an innocent party's consent to a contract.

Accepted Answer

A) True 
 B)False

Question 9

Fact Pattern 13-1 (Questions 5-6 apply)
Moore Properties,Inc.,offers in writing to sell to Lawn Acres Development Corporation a certain half-acre of land for "$112,000." After Lawn Acres signs the offer in acceptance and returns it,Moore discovers that the price should have been stated as "$121,000."
-Refer to Fact Pattern 13-1.Moore's misstatement of the price is

Accepted Answer

A) a bilateral mistake. 
B) a fraudulent misrepresentation. 
C) a unilateral mistake. 
D) unconscionable. 
A) a bilateral mistake. 
B) a fraudulent misrepresentation. 
C) a unilateral mistake. 
D) unconscionable.

Question 10

Duress is a defense to the enforcement of a contract,but not a ground for rescission of a contract.

Accepted Answer

A) True 
 B)False

Question 11

Barb,a real estate agent,is showing John a house.She tells him that this is a house where "his family can live happily ever after." John buys the house,but his wife does not like it.John

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 12

A mistake of fact can only be mutual.

Accepted Answer

A) True 
 B)False

Question 13

Byron agrees to sell to Charity,for $1,500,a remote parcel of land.They be?lieve the land to be worthless,but beneath it is a gold mine.A court would

Accepted Answer

A) cancel the contract due to Byron's failure to know the land's value. 
B) cancel the contract due to Charity's failure to know the land's price. 
C) cancel the contract due to the difference between the contract price and the market price. 
D) enforce the contract. 
A) cancel the contract due to Byron's failure to know the land's value. 
B) cancel the contract due to Charity's failure to know the land's price. 
C) cancel the contract due to the difference between the contract price and the market price. 
D) enforce the contract.

Question 14

A unilateral mistake is a mistake made by both parties to a contract.

Accepted Answer

A) True 
 B)False

Question 15

Kayla wants to rent an apartment from QualityLiving,Inc.The QualityLiving agent knows that many of the QualityLiving apartments have leaky roofs.When Kayla asks the QualityLiving agent if roof of the apartment ever leaks,the agent assures her that there have never been any leaks in any of the apartments.When Kayla moves in,she discovers a large leak in the kitchen and water stains on all the ceilings.Kayla

Accepted Answer

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

Question 16

Minerva,an accountant,convinces her client Ozzie to invest in Idle Schemes,Ltd.,a business with little potential.When Ozzie learns the truth,he

Accepted Answer

A) can do nothing. 
B) may enforce the contract but cannot rescind it. 
C) may rescind the contract but cannot enforce it. 
D) may enforce the contract or rescind it. 
A) can do nothing. 
B) may enforce the contract but cannot rescind it. 
C) may rescind the contract but cannot enforce it. 
D) may enforce the contract or rescind it.

Question 17

Gina induces Hugh to enter into a contract for the purchase of a condominium about which Gina knowingly misrepresents its size.When Hugh discovers the truth,he can

Accepted Answer

A) not rescind the contract. 
B) rescind the contract on the basis of fraud. 
C) rescind the contract on the basis of mistake. 
D) rescind the contract on the basis of undue influence. 
A) not rescind the contract. 
B) rescind the contract on the basis of fraud. 
C) rescind the contract on the basis of mistake. 
D) rescind the contract on the basis of undue influence.

Question 18

Under contract law,an innocent party need not suffer an injury to recover damages in a case involving a contract with fraudulent terms.

Accepted Answer

A) True 
 B)False

Question 19

Joy and Karl contract for the sale of Joy's prize-winning show dog for $1,000.Unknown to either party,the dog has died.Karl is

Accepted Answer

A) entitled to another dog of equivalent value. 
B) not required to pay due to the bilateral mistake. 
C) not required to pay due to the unilateral mistake. 
D) required to pay because he assumed the risk the dog might die. 
A) entitled to another dog of equivalent value. 
B) not required to pay due to the bilateral mistake. 
C) not required to pay due to the unilateral mistake. 
D) required to pay because he assumed the risk the dog might die.

Question 20

Seth offers to buy a house from Tia for less than Tia paid for it,stating that he would "hate to see anything bad happen to Tia or her house." Tia agrees to sell. Regarding this agreement,a court would likely

Accepted Answer

A) enforce it. 
B) not enforce it. 
C) rescind it. 
D) order the parties to renegotiate it. 
A) enforce it. 
B) not enforce it. 
C) rescind it. 
D) order the parties to renegotiate it.

Exam 13: Mistakes and Other Contract Defects

A contract is sometimes voidable if one party is aware that the other party made a mistake of fact.

For a party to a contract to receive relief from either a unilateral or a bilateral mistake,the mistake must involve a material fact.

The identity of one of the parties to a contract is an example of a material fact.

An innocent party can sometimes enforce a fraudulent con?tract.

Used Car Lot's salesperson Vic offers to sell Will,who is twenty years of age,a car about which Vic intentionally misrepresents its past use and repairs.In reliance on the misrepresentations,Will buys the car.To prove fraud in this transaction,Will does not have to show that

The presence of fraud does NOT affect the authenticity of an innocent party's consent to a contract.

Duress is a defense to the enforcement of a contract,but not a ground for rescission of a contract.

Barb,a real estate agent,is showing John a house.She tells him that this is a house where "his family can live happily ever after." John buys the house,but his wife does not like it.John

A mistake of fact can only be mutual.

Byron agrees to sell to Charity,for $1,500,a remote parcel of land.They be?lieve the land to be worthless,but beneath it is a gold mine.A court would

A unilateral mistake is a mistake made by both parties to a contract.

Minerva,an accountant,convinces her client Ozzie to invest in Idle Schemes,Ltd.,a business with little potential.When Ozzie learns the truth,he

Gina induces Hugh to enter into a contract for the purchase of a condominium about which Gina knowingly misrepresents its size.When Hugh discovers the truth,he can

Under contract law,an innocent party need not suffer an injury to recover damages in a case involving a contract with fraudulent terms.

Joy and Karl contract for the sale of Joy's prize-winning show dog for $1,000.Unknown to either party,the dog has died.Karl is

Seth offers to buy a house from Tia for less than Tia paid for it,stating that he would "hate to see anything bad happen to Tia or her house." Tia agrees to sell. Regarding this agreement,a court would likely

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