Exam 5: Genuineness of Assent

Where two parties contract for the sale of an old violin,but neither party realizes that it is a rare and extremely valuable violin,this is a mutual mistake of fact allowing rescission.

Murphy owned some farmland outside the city.He was interested in selling the land,so he told the first prospective purchaser,Jim,that the state was going to build a bypass around the city that would go directly through this land,making it more valuable.Murphy told Jim that he would like to hold on to the land until the bypass was built,but he needed money desperately.Based on Murphy's statements,Jim bought the land for $2,000 per acre.As farmland,it was worth only $1,000 per acre,but with the bypass,it would be worth $5,000 per acre.Murphy knew that there were no plans for a bypass.Jim learns of this,and sues Murphy.Discuss whether Jim has any grounds to obtain relief in this situation.Discuss fully the legal theories involved.

Beta Construction Company,a subcontractor,understates its bid due to a clerical error.If Acme Construction is the general contractor,can Acme enforce the contract as bid?

No special relationship between the parties is necessary to find undue influence.

An ambiguity in a contract will not constitute a mutual mistake of material fact.

A party who has been a victim of fraud in the inducement can:

Bob sees a used car advertised as having 65,000 miles on it,the same as the odometer shows.Bob has the car inspected by a mechanic who says,"I think this car actually has about 100,000 miles on it,but it is in excellent condition." Frank buys the car and the engine fails a month later.Based on this,Frank:

Assent may still be present even if a party entered into a contract based on mistake.

Billy is out in the bars one hot August afternoon and runs into Carl Coach,who coaches the football team where he went to college.Billy invites Carl to join him for drinks,and they have the following conversation: Billy: I need to talk to you about the upcoming football season.I need you to make sure that the football team wins each game by as much as possible.For each game that the team wins by at least 25 points,I'll give you $1,000. Carl: I don't know if I can promise that.I don't know if any coach could. Billy: Well,I'll even give you an extra $500 if it's by more than 35 points. Carl: That sounds good.I can do that with this team. Billy: Great! Here's to a good season! And,they toast pitchers of beer.The team is undefeated that year,winning all but two games by more than 25 points and 3 of them by more than 35 points.The other two games were each won by 20 points.At season's end,Billy has paid nothing to Carl.Carl sues Billy for payment.Billy sues Carl to recover loses caused because of bets he placed in the two games won by only 20 points.Discuss the arguments that each has with respect to this agreement and the likely outcome.

Where one party takes advantage of a confidential relationship when entering into a contract,the remedy would be based on:

Mark was shopping for a used car in February.He went to AutoMegaWorld and test drove a used 2000 Tiger XL.While driving the car,he looked at the climate control center and noticed that the temperature lever was marked "cold" at one end in blue and "hot" in red at the other end.Mark assumed that the "cold" marking meant that the car had air conditioning.Mark wanted to finally have an air-conditioned car.Before test driving any cars,Mark had discussed with the salesperson what he wanted in a car,and mentioned air conditioning as a top priority.Mark and the salesperson had no other discussions about air conditioning generally or in connection with this particular car.When Mark was showing his new car off to friends,one of them showed him that the car was not air conditioned.In this circumstance,most likely:

Nancy was shopping for a new car and had a 1998 Honda Accord to trade in.In the negotiating process,the appraiser at the dealer took her car for a test drive to aid in the appraisal process.Nancy had found a car she liked and began negotiations in earnest.They settled on a price for the new car,with a final agreement contingent on an acceptable amount for the trade-in.When the sales manager brought a contract showing the price of the new car,with the deduction for the trade in,it noted "1999 Accord" as the car traded in.Everything else in the car's description (mileage,etc.)was correct.Nancy noticed this but said nothing and quickly signed the contract.A few minutes later when Nancy went to sign over the certificate of title on her old car,the sales manager said that the deal was off because he had based his trade-in allowance on the car being a 1999 model.Nancy said she would take the deal only as it was,and would not accept a lower trade-in allowance.After some further negotiations,the dealer agreed to grant the trade-in allowance as originally stated.Nancy signed over the title and took the new car home.The next morning,the sales manager called and said that the dealer was rescinding the contract based on the mistake.Discuss the issues and how this case would turn out.

Intentional misrepresentation is commonly referred to as "fraud."

In undue influence,the persuasion by the dominant party must have overcome the free will of the innocent party.

A fraudulent misrepresentation may be used to show that genuine assent was lacking in a parties' contract.

A misrepresentation of law is actionable if one party to the contract is a professional and should know what the law is and intentionally misrepresents the law to a less sophisticated contracting party.

The assent of parties to a contract must be voluntary.

Undue influence is characterized by one party being put at a disadvantage in a contract due to:

Joanne goes to a garage sale where she finds jewelry for sale.She buys a handful of what appears to be costume jewelry for her daughter to play with.She pays $5 for it.Later,a friend of Joanne happens to see the jewelry and discovers that one piece consists of diamonds and is worth about $2,000.If the seller of the jewelry seeks to rescind this contract,which of the following is true?

Which of the following is true about misrepresentations of law?