Exam 17: Legal Assent

"Pet Pig Farm." Marcy wanted to buy Lucy's land and use it to breed small pigs to be kept as pets. Marcy told Lucy that having water on the property was very important although she did not mention to Lucy her plan to breed small pigs. Lucy assured her that a spring ran through one corner of the property. Therefore, Marcy agreed to buy the farm. Marcy, who loved pigs, assumed that the neighbors would be pleased with the pigs being in the area. Lucy also agreed to sell Marcy a used truck for $5,000. After the contract for the land sale was entered into, Marcy had a land survey done, and it was discovered that actually the spring did not run through the corner of Lucy's property. The area in which the spring ran actually belonged to a neighbor. Additionally, when Lucy brought Marcy the used truck, Marcy said, "That's not the truck!" It was discovered that Lucy, who had two trucks, thought that Marcy had bought the older truck although Marcy thought she had purchased the newer truck. Marcy was also surprised when she received a petition signed by all surrounding landowners objecting to the presence of the pigs and threatening to sue Marcy for nuisance. It will cost Marcy more than she had agreed to pay Lucy in order for Marcy to obtain a similar farm which actually has a spring on it. -Assuming that Lucy innocently made a misrepresentation regarding the spring running through the corner of the farm with no reason to believe that was incorrect, which of the following is true, considering only the lack of a spring issue, if Marcy does not want to go through with the sale?

A[n] ______ mistake is the result of an error by one party about a material fact.

In determining whether a mistake of fact occurred, what of the following is true?

"Scheming Friends." Willy very much wants to rent a basement apartment in Weaver's home. Willy threatens to tell all Weaver's friends that he and Weaver had been arrested for illegally smoking marijuana unless Weaver rents the apartment to him for $100 per month. (The information regarding the arrests is true.) Weaver reluctantly agrees to rent the apartment to Willy for $100 per month. Willy also wants to buy Weaver's car. Weaver runs back the odometer on the car before Willy test drives it. Willy is impressed by the low mileage and agrees to buy the car. Weaver offers to sell Willy a ring for Willy's fiancée. Weaver tells Willy that the ring is a diamond and believes that to be true. After the deal is made, however, a jeweler friend of Weaver informs him that the ring is a fake. When Willy shows up with the money, Weaver says nothing. He just hands Willy the ring and takes the money. Later, Willy finds out that the odometer was run backwards from another friend to whom Weaver confided. Willy also finds out from his girlfriend that the ring is a fake. -Which of the following is true regarding Willy's rights in regards to the ring purchase?

Why does there need to be a concept of legal assent?

Which of the following was the result on appeal in the case in the text, Gary W. Cruse and Venita R. Cruse v. Coldwell Banker/Graben Real Estate Inc., in which the court considered whether the plaintiffs could prevail based on alleged misrepresentations by a salesman that a house was new when it was actually not new leading the plaintiffs to forego a home inspection?

"Cheap Motorcycle." Tony, a hateful, disgruntled, business law teacher notices that a student, Peter, who is past the age of majority, has a nice motorcycle that is for sale. Peter has struggled through school, is in his last semester, and needs to pass business law in order to graduate. Tony tells Peter that he would like to see Peter pass and, in the next sentence, says that he wants to buy the motorcycle for $100, a price far below the value of the motorcycle. Peter asks if Tony is serious about the price, and Tony replies, "I have the power here! Take it or leave it!" Tony proceeds to draw up a contract for the sale of the motorcycle for $100 which Peter signs. Peter does some research and finds that Tony has had several arrests for driving under the influence in a nearby town. As an act of revenge, Peter tells Tony that unless Tony sells Peter his new Mustang convertible for $50, he is publishing the facts about the arrests in the school newspaper. Tony reluctantly agreed to the deal. -Which of the following is an appropriate term for the contract drawn up by Tony?

When duress is at issue, the _____ needed for legal consent has been removed by the specifics of the threat.

A[n] ______ misrepresentation results from a false statement about a fact material to an agreement that the person making the statement believed to be true.

Susie and Sam have significant funds invested with a stock broker named Will and also with other brokers. Susie and Sam decided to divorce. Susie was really interested in investments, so the divorce decree provided that Susie would retain "all investment accounts," and Sam would receive a "cash settlement" from funds the parties had in the bank. Six months after the divorce was final, it was discovered that Will had absconded to parts unknown with all the money invested with him. Susie could have withdrawn the funds at the time of the divorce, before Will left town, but she had no reason for concern and left the funds there for investment purposes. After discovering Will's wrongdoing, Susie asked Sam to renegotiate the divorce agreement, but he refused. Which of the following is the most likely result of their dispute if the court follows the decision of the court in Simkin v. Blank, discussed in the text?

George offers to sell Penelope a ring that George found in his yard. He and Penelope look at the ring and decide that they are not sure what it is, probably just a shiny stone. Penelope pays George $10 for the ring. The ring turns out to be a diamond worth much more than $10. George wants the ring back, and Penelope refuses. What is the most likely result?

Which of the following is involved in a situation in which a person refuses to perform according to a contract unless the other person either signs another contract with the one making the threat or pays that person a higher price than was specified in the original agreement?

Which of the following occurs when one of the parties to a contract has so much more bargaining power than the other that he or she dictates the terms of the agreement?

"Pet Pig Farm." Marcy wanted to buy Lucy's land and use it to breed small pigs to be kept as pets. Marcy told Lucy that having water on the property was very important although she did not mention to Lucy her plan to breed small pigs. Lucy assured her that a spring ran through one corner of the property. Therefore, Marcy agreed to buy the farm. Marcy, who loved pigs, assumed that the neighbors would be pleased with the pigs being in the area. Lucy also agreed to sell Marcy a used truck for $5,000. After the contract for the land sale was entered into, Marcy had a land survey done, and it was discovered that actually the spring did not run through the corner of Lucy's property. The area in which the spring ran actually belonged to a neighbor. Additionally, when Lucy brought Marcy the used truck, Marcy said, "That's not the truck!" It was discovered that Lucy, who had two trucks, thought that Marcy had bought the older truck although Marcy thought she had purchased the newer truck. Marcy was also surprised when she received a petition signed by all surrounding landowners objecting to the presence of the pigs and threatening to sue Marcy for nuisance. It will cost Marcy more than she had agreed to pay Lucy in order for Marcy to obtain a similar farm which actually has a spring on it. -Assuming that Lucy fraudulently made a misrepresentation regarding the spring running through the corner of the farm knowing the statement was not correct, which of the following is true, considering only the lack of a spring issue, if Marcy does not want to go through with the sale?

What must a party prove in order to obtain money damages based on a fraudulent misrepresentation when damages are sought?

Threatening physical harm or extortion to gain consent to a contract is classified as undue influence.

Why is it important to distinguish between unilateral and mutual mistakes?

Which of the following involves the active hiding of the truth about a material fact?

Which of the following occurs when a party threatens to file a criminal lawsuit unless consent is given to the terms of a contract?

Sally bought a used computer from Polly for $300. Polly told her that the price seemed fair but that she really had no idea what it was worth and just wanted to get rid of it. Sally, who knew little about computers, thought she had a great deal. After Sally returned home, she discovered from a computer expert friend of hers that the computer was not worth as much as she believed. Sally wanted to return the computer claiming that they were both mistaken about value, but Polly said, "No way!" Who should win in the dispute between Sally and Polly and why?