Exam 14: A: Mistakes,fraud,and Voluntary Consent

An innocent party may seek damages for a fraudulent contract.

A mistake of fact cannot be bilateral.

A seller's failure to disclose a serious defect about a product for sale may give rise to an action for fraud.

Fact Pattern 14-B2 Nano Corporation offers to sell a robotic device to Motor Assembly,Inc. ,but mistakenly transposes some of the digits in the price so that $15,400 appears in the offer as $14,500.Motor accepts the written offer. -Refer to Fact Pattern 14-B2.Motor's best argument in favor of enforcement of the contract is that

Fact Pattern 14-B2 Nano Corporation offers to sell a robotic device to Motor Assembly,Inc. ,but mistakenly transposes some of the digits in the price so that $15,400 appears in the offer as $14,500.Motor accepts the written offer. -Refer to Fact Pattern 14-B2.Nano's best defense against enforcement of the contract is that Opal knew

Misrepresentation of a material fact cannot occur by silence.

Forcing someone to enter into a contract through fear created by threats is undue influence.

Urban City and Thru-way Construction Company enter into a contract that includes calculations.Urban,whose engineer,Sergei,compiled the figures,discovers later that some numbers were added incorrectly,but Thru-way refuses to make changes.Urban can

A contract is termed an adhesion contract when both parties adhere to it.

An innocent party can rescind a fraudulent contract.

Lew believes an old comic book he owns has little value,but Murray is con?vinced it is a valu?able collector's item.Lew sells it to Murray for $10 before learning it is worth $1,000.Lew can

Ben,an accountant,certifies several audit reports on Corporate Business,Inc.(CBI),Ben's client,knowing that CBI intends to use the reports to borrow money from Delta Credit Company.Ben believes that the reports are true and does not intend to deceive Delta,but does not check the re?ports before certifying them.Can Ben be held liable to Delta?

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

A unilateral mistake occurs when only one contracting party is mistaken about a material fact.

Fact Pattern 14-B4 Pete,the owner of Quality Orchards,contracts to sell fruit to Ripe Produce,Inc.When Pete refuses to per?form,Ripe Produce files a suit to enforce the contract. -Refer to Fact Pattern 14-B4.If Pete and Ripe Produce are in a state that does not recognize the doctrine of unconscionability,to defend suc?cess?fully against enforce?ment of the contract on similar grounds,Pete might rely on traditional notions of

Kurt persuades Leo to buy his bicycle by telling Leo that the bike rides "like the wind." Kurt's statement is

Misrepresentation of a material fact can occur through conduct alone.

Fact Pattern 14-B3 In selling a house,Robin tells Destry that the wiring and plumbing are of a certain quality.Robin knows nothing about the quality,but it is not as she specifies.Destry buys the house. -Refer to Fact Pattern 14-B3.Under these circumstances,Destry's best course of action is most likely to

Fact Pattern 14-B4 Pete,the owner of Quality Orchards,contracts to sell fruit to Ripe Produce,Inc.When Pete refuses to per?form,Ripe Produce files a suit to enforce the contract. -Refer to Fact Pattern 14-B4.To defend successfully on the ground of un?con?scionability,Pete must show that enforcement of the contract would be

At an auction for the first time,Max bids on an object,believing that it is worth more than the price asked.When the item proves to be less valuable,Max is