Exam 12: Voluntary Consent

Floramaria is an elderly woman who lives with her niece Galaxy. Floramaria is depend?ent on Galaxy for support. Galaxy advises Floramaria to "invest" in Galaxy's "profes?sional gambling" venture, or Galaxy will no longer support her. Floramaria liq?uidates her other investments and signs a contract with Galaxy, to whom Floramaria gives the funds. Can Floramaria set aside this contract?

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(Essay)

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Question 1

Correct Answer:

Verified

This situation describes undue influence, which arises from a relationship in which one party can, through unfair persuasion, influence or overcome the free will of another.
Other examples of such relationships include business partners, attorney-client, and doctor-patient. A contract entered into under undue influence lacks genuineness of assent and is voidable.
In this problem, the influence of Galaxy over Floramaria is buttressed by Floramaria's reliance on Galaxy for support. Floramaria does not have a claim for duress, but Galaxy's influence over Floramaria's investment decision is an exercise of undue influence. The contract is primarily for the benefit of Galaxy, and Galaxy used unfair persuasion in securing Floramaria's funds. Floramaria can avoid the contract.

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

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Question 2

Correct Answer:

Verified

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

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(True/False)

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Question 3

Correct Answer:

Verified

False

If a contractor's bid contains a mistake in addition when totaling the estimated costs, the contract may not be enforceable.

(True/False)

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Question 4

A deceived person must have a justifiable reason for relying on a misrepresentation.

(True/False)

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Question 5

Jane and Phil enter into a contract, but make a bilateral mistake. For the contract to be rescinded by either party, the bilateral mistake must be about

(Multiple Choice)

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Question 6

Fact Pattern 12-3 Digital Storage, Inc., offers to sell provide cloud-computing services to Entrepreneur Enterprises, Inc., but mistakenly transposes some of the digits in the price so that $15,400 appears in the offer as $14,500. Entrepreneur Enterprises accepts the written offer. -Refer to Fact Pattern 12-3. Entrepreneur Enterprises' best argument in favor of enforcement of the contract is that

(Multiple Choice)

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Question 7

Intent to deceive is an element of fraud.

(True/False)

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Question 8

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

(True/False)

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Question 9

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

(Multiple Choice)

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Question 10

James is in an art gallery when Mitch, 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

(Multiple Choice)

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Question 11

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

(True/False)

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Question 12

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

(Multiple Choice)

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Question 13

Fact Pattern 12-2 Organic Farms Company contracts to buy two tracts of land from Prime Bottomland, Inc. Both parties believe that the two tracts are adjacent, but in fact they are not. Prime Bottomland is still willing to sell the land, but under these circumstances the deal would adversely affect Organic Farms. -Refer to Fact Pattern 12-2. The parties' belief about the adjacency of the property is

(Multiple Choice)

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Question 14

An innocent party can enforce a fraudulent contract and seek damages for any harm resulting from the fraud.

(True/False)

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Question 15

Misrepresentation can occur by words or actions, but not by silence.

(True/False)

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Question 16

Drake enters into a contract with Eve, who claims to have access to a stock-trading algorithm that will multiply an investment many times over. When the results do not match this promise, Drake learns that Eve does not have access to any unique software and files a suit against her, alleging fraud. Proof of an injury is required to

(Multiple Choice)

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Question 17

Misrepresentation of law ordinarily entitles a party to relief from a contract.

(True/False)

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Question 18

In selling a 300-acre farm to Rural Land Investments, Inc., Simone tells the buyer's representative that the land "will be worth twice as much by next year." This is

(Multiple Choice)

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Question 19

In a bike shop, Barrie, who is not knowledgeable about bikes, overhears Cullen say, "This bike could win any race!" Barrie buys the bike, but does not win any races with it. Cullen's statement is

(Multiple Choice)

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Question 20

Showing 1 - 20 of 72

Exam 12: Voluntary Consent

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.

If a contractor's bid contains a mistake in addition when totaling the estimated costs, the contract may not be enforceable.

A deceived person must have a justifiable reason for relying on a misrepresentation.

Jane and Phil enter into a contract, but make a bilateral mistake. For the contract to be rescinded by either party, the bilateral mistake must be about

Intent to deceive is an element of fraud.

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

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

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

An innocent party can enforce a fraudulent contract and seek damages for any harm resulting from the fraud.

Misrepresentation can occur by words or actions, but not by silence.

Misrepresentation of law ordinarily entitles a party to relief from a contract.

In selling a 300-acre farm to Rural Land Investments, Inc., Simone tells the buyer's representative that the land "will be worth twice as much by next year." This is

In a bike shop, Barrie, who is not knowledgeable about bikes, overhears Cullen say, "This bike could win any race!" Barrie buys the bike, but does not win any races with it. Cullen's statement is

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