Deck 11: Defenses to Contract Enforceability

Question 1

Punitive damages are meant to reward the defendant.

Answer 1

False

Question 2

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

Answer 2

True

Question 3

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

Answer 3

True

Question 4

Under the Statute of Frauds,oral contracts are void.

Question 5

A contract entered into under undue influence is voidable.

Question 6

An innocent party does not need to suffer an injury to collect damages as a result of a misrepresentation.

Question 7

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

Question 8

A false statement by an expert to a naive buyer usually will entitle the buyer to rescind or reform a contract.

Question 9

A fact is objective and verifiable.

Question 10

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

Question 11

The Statute of Frauds is a compilation of all the laws and regulations related to fraud.

Question 12

A mistake in value will rarely enable a party to a contract to avoid the contract.

Question 13

Misrepresentation can occur through conduct.

Question 14

A unilateral mistake always gives the mistaken party a right to relief from the contract.

Question 15

Scienter exists if a party makes a statement that he or she be-lievesto be scientifically verifiable.

Question 16

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

Question 17

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

Question 18

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

Question 19

An innocent party may neverrescind a fraudulent con-tract.

Question 20

Words or terms in contracts that are subject to more than one reasonable interpretation can lead to bilateral mistakes.

Question 21

Under the Statute of Frauds,fixtures,such as buildings,growing crops and minerals,are treated as real property.

Question 22

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

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 23

A prenuptial agreement must be in writing to be enforceable.

Question 24

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)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 25

Garth owns two all-terrain vehicles (ATVs),worth $1,000 and $500,re-spec-tively.Helen agrees to buy "Garth's ATV" for $750.Garth believes,in good faith,that he is selling the $500 ATV.Helen believes,in good faith,that she is buying the $1,000 ATV.In this situation

A)Garth is entitled to $750 for the $500 ATV.
B)Helen is entitled to the $1,000 ATV for $750.
C)Helen must buy both ATVs for $1,500.
D)there is no contract.

Question 26

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 makes 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

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 27

An oral contract may be enforceable if the person making the promise could foresee that the promisee would rely on the promise.

Question 28

Prenuptial agreements are agreements made during a wedding ceremony that define each partner's duties to one another during the marriage.

Question 29

An oral contract for a sale of goods for more than $5,000 is not enforceable even if the parties to it admit to its existence in court.

Question 30

A collateral promise is one made by a third party to assume the debts or obligation of a primary party to a contract if the primary party does not perform.

Question 31

A contract must be in writing to be enforceable if the contract makes per-formance possible within any definite period of time.

Question 32

An oral contract may be enforceable if enforcing the promise is the only way to avoid injustice.

Question 33

An oral con-tract for a transfer of land is always enforceable.

Question 34

The primary purpose of the Statute of Frauds is to ensure that all parties to a contract understand all the terms of the contract.

Question 35

A contract must be in writing to be enforceable if it makes performance possible only over a period of more than one year.

Question 36

Under the Statute of Frauds,an oral contract for the transfer of a mortgage is enforceable.

Question 37

A party's oral agreement to pay another's debt is NOT enforceable if the party's main purpose is to derive a benefit for himself or herself.

Question 38

In some states,an otherwise unenforceable oral contract may be enforced under the doctrine of promissory estoppel.

Question 39

Katie and Linda enter into a contract for Katie to buy Linda's house in which there are several terms that are subject to more than one reasonable interpretation.If Katie and Linda attach materially different meanings to a term

A)only Katie will be able to void the contract.
B)only Linda will be able to void the contract.
C)neither Katie nor Linda will be able to void the contract.
D)either Katie or Linda will be able to void the contract.

Question 40

A primary obligation is created when a party agrees to pay for something on the condition that a certain other party does not make the payment.

Question 41

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

A)order the art gallery to pay James the full purchase price.
B)orderMitch to pay James the full purchase price.
C)enforce the contract between James and the art gallery.
D)enforce the contract between James and the art gallery,but order Mitch to pay James the full purchase price.

Question 42

Scienter exists if

A)Martin knows that the transmission on his truck is defective,but does not tell this fact to potential buyers.
B)The racehorse that Karen is trying to sell has a genetic defect,but Karen does not know about the defect,and so she does not warn potential buyers.
C)Jake,a real estate agent,tells a client that he has a house that "will make all her dreams come true."
D)Jon forces Bill to sign a contract to sell Jon a car below market value.

Question 43

Big Dog Security Service,Inc.orally agrees to provide security services for NorthGate Mall for as long as NorthGate Mall requires them.This contract is enforceable by

A)Big Dog Security only.
B)NorthGate Mall only.
C)either party.
D)neither party.

Question 44

Kathleen sells Richard a racehorse for $1,000.Both Kathleen and Richard think that the horse is too slow to win any races.Richard then enters the horse in a race,and it wins easily.He enters it in more races,and the horse soon wins more than $1 million.Kathleen tries to rescind the contract to sell the horse,claiming that it was worth more than $1,000.A court will

A)cancel the contract due to Kathleen's failure to know the horse's value.
B)cancel the contract due to Richard's failure to know the horse's price.
C)cancel the contract due to the difference between the contract price and the horse's true value.
D)enforce the contract.

Question 45

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

A)enforce it.
B)not enforce it.
C)reform it to reflect the true market value of the property.
D)order the parties to renegotiate the price.

Question 46

Mark fails to reveal a material fact in a business deal with Nancy.This constitutes fraud

A)if Mark is unaware of the fact and the failure.
B)if the amount of consideration received is grossly inadequate.
C)if the fact concerns a serious defect known to Mark and unlikely to be known by Nancy.
D)under any circumstances.

Question 47

Selena buys a cell phone for $350 and an air hockey table for $1,500,and signs a one-year employment contract for a $4,000 monthly salary to start at the beginning of the next month.The Statute of Frauds covers

A)the employment contract,and the game table and phone purchases.
B)the employment contract and the game table purchase only.
C)the employment contract only.
D)the game table and phone purchases only.

Question 48

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)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 49

Beau sells a car to Cody without disclosing that the odometer,which reads 40,000 miles,was disconnected 80,000 miles ago.Beau is liable for

A)duress.
B)fraud.
C)mistake.
D)undue influence.

Question 50

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

A)fraud.
B)mistake.
C)undue influence.
D)duress.

Question 51

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

A)amaterial fact.
B)value.
C)anopinion.
D)aprediction.

Question 52

Jayne and Wilbur enter into an oral contract on May 1 under which Jayne agrees to deliver a collection of exotic wines by April 30 of the following year.This contract is enforceable by

A)Jayne only.
B)Wilbur only.
C)either party.
D)neither party.

Question 53

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

A)avoid the contract or choose to carry it out.
B)do nothing once she has signed the contract.
C)recover from her lender for a failure to influence her "due."
D)recover from the bank for a failure to undo Lou's influence.

Question 54

Pete,an accountant,convinces his client Kasey to invest her savings in a nonexistent social-networking Web site.When Kasey learns the truth,she can

A)seek to void the contract on the ground of undue influence.
B)recover damages based on a claim of mistake of value.
C)rescind the contract to invest in the Web site.
D)seek to void the contract on the ground of unconscionability.

Question 55

Marta buys a candy bar for $5 and signs a contract for delivery of fresh flowers to her mother's nursing home every week for the rest of her mother's life.She then enters into a contract to assume George's debt to FastCars Dealership.Marta receives no personal benefit from assuming George's debt.The Statute of Frauds covers

A)the candy purchase only.
B)the candy purchase and the delivery contract only.
C)the contract to assume George's debt only.
D)the contract to assume George's debt and the delivery contract only.

Question 56

Julie orally agrees to assume Carlyle's debt to FunGames,Inc.Julie gets a substantial personal benefit from the agreement-Carlyle agrees to work for Julie's landscaping service for six months.Julie's oral assumption of the debt is enforceable by

A)Julie or Carlyle only.
B)FunGames only.
C)any of the parties.
D)no one.

Question 57

Fiona and Dora enter into an oral contract under which Fiona agrees to work on Dora's farm for not less than one week.This contract is enforce-able by

A)Fiona only.
B)Dora only.
C)either party.
D)neither party.

Question 58

Ilsa and Jiffy Loan Company enter into an oral contract under which Ilsa agrees to pay Kyle's debt if he does not.Ilsa does not get any per-sonal benefit from the agreement.This contract is enforceable by

A)any party.
B)Jiffy only.
C)Jiffy or Kyle.
D)none of the parties.

Question 59

Ted and Svetlana orally agree to several different oral contracts.The Statute of Frauds will bar enforcement of an oral contract for

A)a deal that will be performed within a year.
B)a primary obligation.
C)a sale of goods for $100.
D)a sale of land.

Question 60

Dale files a suit against Evelyn,alleging her fraud in entering into a con-tract with him.Proof of an injury is required

A)to recover damages.
B)to rescind the contract.
C)to undo Evelyn's influence.
D)under no circumstances.

Question 61

Multi Investments,Inc.,offers to buy Nano Toy Corporation.On May 1,Nano provides copies of its financial statements for the pre-vious year,showing an inventory of $10 million.On May 15,Nano discovers that the previous year's inventory is overstated by $5 million,but does not inform Multi.On June 1,Multi,relying on the fi-nancial statements,buys Nano.On June 10,the buyer discovers the inven-tory over-statement.Can Multi succeed in a suit against Nano for fraud?

Question 62

Brenda induces Carmen to enter into a contract for the sale of a gas station and convenience store.Brenda tells Carmen that she is the sole owner,but their signed,written contract lists Brenda's parents as co-owners.The parol evidence rule governs

A)contracts that are induced by fraud.
B)contracts that must be in writing to be enforceable.
C)the admissibility in court of oral evidence.
D)the merging of oral and written statements into one contract.

Question 63

Chloe files a suit against Digital Associates,Inc.(DAI),to enforce a con-tract.The only written evidence of the contract is a memo on DAI's let-terhead as signed by a DAI officer in its files.The con-tract can be en-forced if the memo includes

A)a correct title,such as "Chloe-DAI Contract."
B)all essential terms.
C)a statement of the consideration.
D)the parties' addresses.

Question 64

Evermore Sports Gear Corporation and Trendy Goods,Inc.,enter into a contract.To be enforceable,the contract must include

A)no particular signatures.
B)the signatures of all parties to the deal.
C)the signature of the party against whom enforcement is sought.
D)the signature of the party who is seeking enforcement.

Question 65

Veggie Grocers orders by phone twenty cartons of canned beets from Organic Food Packers,Inc.After ten cartons are delivered and accepted,Veggie repudiates the contract.Organic can enforce the contract to

A)any extent because the order was placed orally.
B)no extent because the order was placed orally.
C)the extent of the ten accepted cartons.
D)the extent of the twenty ordered cartons.

Question 66

Recycled Sales Company and Standard Purchasing Corporation enter into a contract for a sale of goods.To be enforceable,the contract should be in writing if the goods are valued at more than

A)$5.
B)$15.
C)$50.
D)$500.

Question 67

In a transaction for the sale of a warehouse,Standard Storage Company tells Tri-County Investment Corporation that the office furniture is in-cluded.The contract says nothing about office furniture,but does state,"This document supersedes all oral promises relating to the sale." Is the furniture part of the sale? Why or why not?

Question 68

Wild Rides Theme Park owes both RollercoasterRepair,Inc.and Hot Dog Harry money.RollercoasterRepair orally agrees to assume Wild Rides's debt to Hot Dog Harry to prevent Hot Dog Harry from filing suit against Wild Rides.This contract is enforceable by

A)no party.
B)any party.
C)Wild Rides only.
D)RollercoasterRepair only.

Question 69

Valley Tack Shop signs a contract with Gary's Boots and Saddles for delivery of five saddles that cost $200 each.To be enforceable under the Statute of Frauds,the written contract must designate

A)the method of delivery.
B)the method of payment.
C)the quantity of saddles.
D)the seller.

Question 70

Miranda orally promises Nicky that she will buy his fishing trawler for $20,000.If Nicky acts in reliance on this promise,under the doctrine of promissory estoppel,the transaction is enforceable by

A)either party.
B)Miranda only.
C)neither party.
D)Nicky only.

Question 71

Atlantic Applications,Inc.,and Pacific Resale Company (PRC) enter into an oral contract for Atlantic's sale to PRC of six used forklifts for $1,900 each.Before PRC takes posses-sion of the items,this contract is enforce-able by

A)either party.
B)neither party.
C)Atlantic only.
D)PRC only.

Question 72

Dixie May enters into a contract to buy one hundred pounds of pecans from Margaret.The contract must be in writing if the pecans cost

A)$100.
B)$150.
C)$250.
D)$500.