Deck 12: Reality of Assent

Question 1

A misrepresentation is an untruthful assertion by one of the parties about a material fact.

Answer 1

True
Explanation: A misrepresentation is an untruthful assertion by one of the parties about a material fact.One party said something that prevented the parties from having the mental agreement necessary for a legal contract.The parties only appeared to agree,so their contract lacked legal assent.

Question 2

In terms of the elements of fraudulent misrepresentation,there must have been justifiable reliance on the false statement by the innocent party to the agreement.

Answer 2

True
Explanation: Fraudulent misrepresentation has three elements: a)a false statement about a past or existing fact that is material to the contract; b)intent to deceive; and c)justifiable reliance on the false statement by the innocent party to the agreement.

Question 3

Today,nondisclosure is especially likely to provide the basis for rescission when one party has information about a basic assumption of the deal that is unavailable to the other party.

Answer 3

True
Explanation: Today,nondisclosure is especially likely to provide the basis for rescission when one party has information about a basic assumption of the deal that is unavailable to the other party.As a result of this logic,sellers have a special duty to disclose because they know more about the structural makeup of the item being purchased.

Question 4

When a contract is voidable,it may be ________ or canceled.

A)rescinded
B)decertified
C)void ab initio
D)antedated
E)quid pro quo

Question 5

When both parties to a contract are mistaken about either a current or a past material fact,either party can choose to rescind the contract.

Question 6

Nondisclosure involves the active hiding of the truth about a material fact pertaining to a contract.

Question 7

European courts permit contract rescission for a mistake of value when the mistake involves more than 50 percent of the value at the time of the contract.

Question 8

Generally,a unilateral mistake makes a contract void.

Question 9

Major obstacles to genuine assent include mistake and misrepresentation,but not undue influence or duress.

Question 10

Fraudulent misrepresentation is intentional misrepresentation.

Question 11

Duress is found when one party is forced into an agreement by the wrongful act of another.

Question 12

With negligent misrepresentation,even though there was no actual intent to deceive,the party making the false statement is treated in contract law as if the intent were present.

Question 13

In the Philippines,if consent is given through mistake,violence,intimidation,undue influence,or fraud,contracts are valid until they are annulled,and there is no time limitation on the protected party to obtain an annulment.

Question 14

When a contract is voidable,it may be rescinded.

Question 15

A negligent misrepresentation results when the party making the statement would have known the truth about the fact had he used reasonable care to discover or reveal it.

Question 16

Scienter is a required element of innocent misrepresentation.

Question 17

For a mutual mistake to interfere with legal consent,it must involve a basic assumption about the subject matter of the contract.

Question 18

Undue influence is a situation in which one person has taken advantage of his or her dominant position in a relationship to unduly persuade the other person.

Question 19

Until recently,courts have been hesitant to use nondisclosure as a basis for rescinding a contract.

Question 20

Mistakes in contract law do not result from untrue statements made by one party to the contract.

Question 21

Which of the following is necessary in order to establish that a mutual mistake involving a basic assumption about the subject matter of a contract was made?

A)That the mistake involved the existence,quality,or quantity of the items to be exchanged.
B)That the mistake involved whether a party could profit from the contract.
C)That the mistake involved whether a party could profit from the contract or whether a party misunderstood the time constraints involved in the contract.
D)That the mistake involved the identity of parties to the contract or whether a party misunderstood the time constraints involved in the contract.
E)That the mistake involved a misunderstanding regarding the applicability of the Uniform Commercial Code to the contract.

Question 22

In Indian Law,duress is referred to as ________.

A)coercion
B)undue influence
C)unforced contractual relations
D)subjective bias
E)objective bias

Question 23

A person who makes a misrepresentation but has no knowledge about the falsity of the statement does not have ________.

A)information
B)premeditation
C)planning
D)plotting
E)scienter

Question 24

Which of the following is an incorrect statement regarding rescinding a contract in the Philippines?

A)If consent is given through mistake,violence,intimidation,undue influence,or fraud,contracts are valid until they are annulled.
B)The period in which to annul a contract for mistake,violence,intimidation,undue influence,or fraud is four years.
C)In cases of intimidation,violence,or undue influence,the time period for annulling a contract is measured from the time the defect in the assent ceases.
D)In cases of mistake or fraud,the time period for annulling a contract is measured from the time of the discovery of the defect.
E)The law of the Philippines regarding contract rescission for mistake,violence,intimidation,undue influence,or fraud is the same as United States law.

Question 25

Mistakes in contracts may be classified as either ________.

A)void or voidable
B)primary or secondary
C)conditional or unconditional
D)in rem or quasi in rem
E)unilateral or mutual

Question 26

Any fraud on the part of a party to a contract provides a basis for ________.

A)judicial recognition of an equitable remedy for the defendant
B)judicial recognition of an implied-in-law contract
C)judicial enforcement of an implied-in-fact contract
D)contract rescission
E)contract reformation

Question 27

A(n)________ is an erroneous belief about the facts of a contract at the time the contract is concluded.

A)assumption
B)projection
C)abeyance
D)mistake
E)accord

Question 28

For a mutual mistake to interfere with legal consent,it must involve a ________ effect on the agreement.

A)conditional
B)material
C)tertiary
D)criminal
E)statutory

Question 29

In general,a ________ mistake does not generally void a contract.

A)conditional
B)mutual
C)unilateral
D)bilateral
E)primary

Question 30

The Peerless ship case referenced in the textbook is a classic example of a ________ mistake.

A)unilateral
B)mutual
C)conditional
D)secondary
E)non-material

Question 31

An error by one party about a material fact is known as a ________ mistake.

A)primary
B)mutual
C)unilateral
D)secondary
E)conditional

Question 32

A false statement about a fact material to an agreement that the person making the statement believed to be true is considered a(n)________.

A)commercial disparagement
B)innocent misrepresentation
C)fraudulent misrepresentation
D)scienter-based misrepresentation
E)criminal misrepresentation

Question 33

Which of the following was the result on appeal in Telekenex IXC,Inc.v.Charlotte Russe,Inc.,the case in the textbook in which the defendant claimed that an amendment to a contract for communication services was unenforceable because it was entered into based on a threat that the services would be discontinued otherwise?

A)The court found that the defendant had established a prima facie defense of duress and remanded the case for further proceedings.
B)The court found that the defendant had established a prima facie defense of misrepresentation and remanded the case for further proceedings.
C)The court found that the defendant had established a prima facie defense of undue influence and remanded the case for further proceedings.
D)The court found that the defendant was bound to the amendment because no one forced the agreement.
E)The court found that the defendant was bound to the amendment because the defendant had begun performance under it.

Question 34

What was the result in Scott v.Mid-Carolina Homes,Inc.,the case referenced in the textbook in which the defendant attempted to rescind a contract to sell a mobile home because its salesperson was acting under a mistake of fact when he gave the plaintiff the sales price?

A)The seller was allowed to rescind the contract because a unilateral contract was involved.
B)The seller was allowed to rescind the contract because a bilateral contract was involved.
C)The seller was allowed to rescind the contract because the mistake involved a price differential of over twenty-five percent.
D)The seller was allowed to rescind the contract because the mistake involved a price differential of over fifty percent.
E)The seller was not allowed to rescind the contract.

Question 35

An error on the part of both parties to an agreement is a ________ mistake.

A)primary
B)mutual
C)unilateral
D)secondary
E)conditional

Question 36

Which of the following must a mutual mistake involve in order for a mutual mistake to interfere with legal consent?

A)A basic assumption about the subject matter of the contract.
B)A material effect on the agreement.
C)A basic assumption about the subject matter of the contract and an adverse effect on a party who did not agree to bear the risk of mistake at the time of the agreement,but not a material effect on the agreement.
D)A basic assumption about the subject matter of the contract,a material effect on the agreement,and an adverse effect on a party who did not agree to bear the risk of mistake at the time of the agreement.
E)An admission by one of the parties that a misrepresentation occurred.

Question 37

Major obstacles to genuine assent include all but which of the following?

A)mistake
B)misrepresentation
C)factual capacity
D)undue influence
E)duress

Question 38

What was the result in the Peerless case referenced in the textbook in which there were two ships named Peerless and the parties disagreed over which ship was the subject of the contract?

A)The court rescinded the contract.
B)The court ruled that the older ship would be identified to the contract.
C)The court ruled that the newer ship would be identified to the contract.
D)The court ruled that the defendant would be allowed to choose which ship would be identified to the contract.
E)The court ruled that the plaintiff would be allowed to choose which ship would be identified to the contract.

Question 39

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?

A)The ring will be returned to George because of mutual mistake.
B)The ring will be returned to George because of unilateral mistake.
C)The ring will be returned to George because of equity.
D)The ring will remain with Penelope unless George can establish that she was negligent in not recognizing the ring's true value.
E)The ring will remain with Penelope because the parties contracted on the assumption that they did not know the value of the ring.

Question 40

Distinguishing between unilateral and mutual mistakes is important because the classification bears on which contracts ________.

A)are void
B)are voidable
C)lack consideration
D)lack legality
E)are entitled to enforcement in a court of equity

Question 41

Which of the following involve(s)the active hiding of the truth about a material fact?

A)Concealment
B)Nondisclosure
C)Negligence
D)Concealment,nondisclosure,or negligence
E)Concealment and nondisclosure,but not negligence

Question 42

Which of the following occur(s)when a party threatens to file a criminal lawsuit unless consent is given to the terms of a contract?

A)Duress
B)Undue influence
C)Durable fraud
D)Criminal influence
E)Duress and undue influence,but not durable fraud

Question 43

Which of the following refer(s)to the failure to provide pertinent information about a projected contract?

A)Concealment
B)Nondisclosure
C)Negligence
D)Concealment,nondisclosure,or negligence
E)Concealment and nondisclosure,but not negligence

Question 44

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?

A)Fraudulent duress
B)Conditional duress
C)Negligent duress
D)Economic duress
E)Undue influence

Question 45

Which of the following occur(s)when one party threatens physical harm to gain consent to a contract?

A)Duress
B)Undue influence
C)Disparagement
D)Criminal influence
E)Duress and disparagement,but not undue influence

Question 46

When the party making the statement would have known the truth about the fact had he used reasonable care to discover or reveal it,the statement is a(n)________.

A)innocent misrepresentation
B)fraudulent misrepresentation
C)non-material misrepresentation
D)negligent misrepresentation
E)commercial disparagement

Question 47

A ________ is a false representation of a material fact that is consciously false and intended to mislead the other party.

A)negligent misrepresentation
B)fraudulent misrepresentation
C)defalcation
D)negligent misrepresentation,fraudulent misrepresentation,or defalcation
E)fraudulent misrepresentation or defalcation,but not a negligent misrepresentation,

Question 48

Which of the following occurs when a party threatens to file a legitimate (in other words,a non-frivolous)civil lawsuit unless another party gives consent to the terms of a contract?

A)Duress
B)Undue influence
C)Durable fraud
D)Criminal influence
E)None of the above

Question 49

Under what condition(s)will a court now find nondisclosure as having the same legal effect as an actual false assertion?

A)When a relationship of trust exists between the parties to the contract.
B)When there is a failure to correct assertions of fact that are no longer true in light of events that have occurred since the initial consent to the terms of the agreement.
C)When the transaction at issue is the first contractual relationship between the parties.
D)When a relationship of trust exists between the parties to the contract,and when there is a failure to correct assertions of fact that are no longer true in light of events that have occurred since the initial consent to the terms of the agreement.
E)When a relationship of trust exists between the parties to the contract,when there is a failure to correct assertions of fact that are no longer true in light of events that have occurred since the initial consent to the terms of the agreement,and when the transaction at issue is the first contractual relationship between the parties.

Question 50

Which of the following are elements of fraudulent misrepresentation?

A)A false statement and a mutual mistake
B)A false statement and intent to deceive
C)Intent to deceive and negligent representation of a material fact
D)A commercial relationship between the parties and negligent misrepresentation of a material fact
E)A non-commercial relationship between the parties and duress

Question 51

Which of the following occur(s)when a party threatens to file a frivolous civil lawsuit unless another party gives consent to the terms of a contract?

A)Duress
B)Undue influence
C)Durable fraud
D)Criminal influence
E)Duress and undue influence,but not durable fraud

Question 52

Which of the following refers to a special relationship in which one person has taken advantage of his or her dominant position in a relationship to unduly persuade the other person?

A)Fraudulent misrepresentation
B)Undue influence
C)Economic duress
D)Physical duress
E)Conscionability

Question 53

Which of the following is/are found when one party was forced into an agreement by the wrongful act of another?

A)Duress
B)Negligence
C)Fraud
D)Duress,negligence,or fraud
E)Duress and fraud,but not negligence

Question 54

Heather innocently misrepresented the status of a puppy as being a full-blooded Pomeranian when actually it was a mixed breed.Brad had contracted to purchase the dog,but the problem was discovered prior to his paying for the dog and picking it up.Nevertheless,Brad was very angry and felt that Heather should have been more careful.He said that he planned to rescind the contract and also sue her for damages to punish her and deter others from behaving similarly.Which of the following is true regarding the remedies available to Brad?

A)Because Heather violated the contract to provide a full-blooded Pomeranian,Brad is entitled to rescind the contract and to the damages he seeks.
B)Because Heather violated the contract to provide a full-blooded Pomeranian,Brad is entitled to rescind the contract,but he is not entitled to the damages he seeks.
C)Because Heather is not guilty of any wrongdoing,Brad is entitled to no remedy,and Heather has an additional thirty days to honor the contract.
D)Because Heather is not guilty of any wrongdoing,Brad is entitled to no remedy,and Heather has an additional sixty days to honor the contract.
E)Because Heather is not guilty of any wrongdoing,Brad is entitled to no remedy,and Heather has an additional ninety days to honor the contract.

Question 55

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

A)free will
B)knowledge
C)scienter
D)consideration
E)realization

Question 56

As discussed in the textbook,which of the following is true in China when an outsider allegedly commits or actually commits fraud in the course of business dealings with Chinese firms?

A)Because of the governmental interest in increasing international business,it is very difficult to prove fraud when international business is involved.
B)Because of the governmental interest in increasing international business,few penalties are imposed on international businesses that commit fraud.
C)Because of the governmental interest in increasing international business,it is very difficult to prove fraud when an international business is involved,and few penalties are imposed on international businesses that commit fraud.
D)Chinese law does not recognize the concept of fraud.
E)Fraudulent misrepresentations have resulted in heavy fines and refusals to allow any more agreements with Chinese firms.

Question 57

Jane operates a home decorations shop selling slightly used goods.She bought a painting from Sally for the shop.Bob came into the shop and asked if the painting was by Bill,a local artist of some repute.Jane,without checking with Sally,says,"I'm sure it is" because she really did think it looked like one of Bill's paintings.Bob bought the painting.A week or so later,he took the painting by Bill's studio.Bill just laughed and said that he never painted anything that horrible.Bob took the painting back to Jane and asked for a refund.Jane refused on the basis that she never gave refunds and that Bob took the risk that the painting was not done by Bill.Should Bob sue in small claims court,who will likely win and why?

A)Bob,on the basis of negligent misrepresentation.
B)Bob,on the basis of innocent misrepresentation.
C)Bob,on the basis of a unilateral mistake.
D)Jane,on the basis that Bob accepted the risk of loss.
E)Jane,both on the basis that Bob accepted the risk of loss and that he agreed by an oral contract to purchase the painting.

Question 58

Which of the following is/are available to a party who was misled by a false statement contained in an innocent misrepresentation?

A)Rescission of the contract only
B)Compensatory damages and rescission of the contract
C)Punitive damages,compensatory damages,and the right to rescind the contract
D)Exemplary damages,compensatory damages,and the right to rescind the contract
E)Nominal damages only

Question 59

What is the effect of a negligent misrepresentation?

A)It is treated as an ethics violation,and is punishable per se as a white-collar crime.
B)It is treated the same as an innocent misrepresentation.
C)It is treated the same as a fraudulent misrepresentation.
D)It is treated the same as a non-material misrepresentation.
E)It is treated the same as an implied misrepresentation.

Question 60

Bruce runs back the odometer on his car to make it appear as if it had fewer miles.Wally buys the car.When he checks back through past sale reports through his state's title office,Wally discovers that the car had fewer miles when Bruce sold it to him than it had when a previous owner sold it to Bruce.In legal terms,in selling the car knowing that he had tampered with the odometer,Bruce is said to have had ________.

A)negligence
B)commercial impracticability
C)scienter
D)oversight
E)inattentiveness

Question 61

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.Weaver reluctantly agrees to rent the apartment to Willy for that amount.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.Finally,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's 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 agreement to purchase the ring?

A)He will not be able to rescind the contract because Weaver did not make an express false statement regarding the ring.
B)He will not be able to rescind the contract because Weaver did not make an express false statement regarding the ring and because Weaver did not know the ring was a fake when the initial agreement was made.
C)He will not be able to rescind the contract unless he can prove that Weaver was at least negligent in not realizing the ring was a fake when the initial agreement was made.
D)He will be able to rescind the agreement because Weaver caused him duress.
E)He will be able to rescind the agreement because Weaver committed fraudulent misrepresentation.

Question 62

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.Lucy assured her that a spring ran through one corner of the property.Therefore,Marcy agreed to buy the farm.Although she did not ask Lucy anything about it,Marcy,who loved pigs,assumed that the neighbors would be pleased with the pigs being in the area.In a separate contract,Lucy also agreed to sell Marcy a used truck for $5,000.After the contract for the land sale was entered into,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 when 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.Assuming that Lucy innocently made a misrepresentation regarding the spring running through the corner of the farm with no reason to believe that was not correct,considering only the lack of a spring issue,which of the following is true if Marcy does not want to go through with the sale of the farm?

A)Marcy may rescind the contract and recover compensatory damages only.
B)Marcy may rescind the contract,but she may not recover damages.
C)Marcy may sue for damages,but she may not rescind the contract.
D)Because Lucy acted with scienter,Marcy may receive reliance damages in addition to compensatory damages,but she may not rescind the contract.
E)Because Lucy acted with scienter,Marcy may receive reliance damages in addition to compensatory damages,and she may rescind the contract.

Question 63

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.Lucy assured her that a spring ran through one corner of the property.Therefore,Marcy agreed to buy the farm.Although she did not ask Lucy anything about it,Marcy,who loved pigs,assumed that the neighbors would be pleased with the pigs being in the area.In a separate contract,Lucy also agreed to sell Marcy a used truck for $5,000.After the contract for the land sale was entered into,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 when 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.Which of the following is the most likely result in the dispute between Marcy and Lucy regarding which used truck was sold assuming that both Marcy and Lucy were each innocently mistaken and did not intend to defraud the other?

A)The contract will be rescinded.
B)Marcy will be allowed to pick the truck she wants to buy because she is the buyer,and she may also recover damages.
C)Lucy will be allowed to pick the truck she wants to sell because she is the seller.
D)Marcy will be allowed to pick the truck she wants to buy because she also had a contract on the ancillary farm.
E)Marcy will be allowed to pick the truck she wants to buy because she is the buyer,but she may not recover damages.

Question 64

What must a plaintiff prove in order to establish fraudulent misrepresentation and recover damages as a result?

Question 65

A relationship in which one party has an unusual degree of ________ in the other can trigger concern about undue influence in gaining the assent of the more dependent party.

A)interest
B)investment
C)trust
D)involvement
E)both investment and involvement

Question 66

List the three reasons referenced in the textbook that would permit a court to invalidate a contract on the basis of unilateral mistake.

Question 67

Bob offered to sell Teresa his used motorcycle.She took a look at it and asked Bob how it ran,to which Bob replied that it was in good shape.Teresa thought the motorcycle was two years old when she purchased it.A few days later,she discovered that it was actually five years old.She asks Bob to take back the motorcycle.He tells her no way,that he thought she knew the age of that model,and that she should have asked him if she had any uncertainty.If Teresa sues,who is likely to win and why?

Question 68

Maurice offered to sell his used computer to Mike for $300,and Mike accepted.Both Maurice and Mike believed that the computer was one year old.When the receipt was found,however,it was discovered that the computer was actually 18 months old.Mike wants out of the agreement based on mutual mistake.Which of the following is Maurice's best position in an attempt to enforce the contract?

A)That the mistake did not have a material effect on the agreement.
B)That the mistake should be allocated equally between the parties.
C)That a mutual mistake was involved.
D)That a unilateral mistake was involved.
E)None of these,because as a matter of law,Mike can legally avoid the contract with this type of mistake.

Question 69

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.Lucy assured her that a spring ran through one corner of the property.Therefore,Marcy agreed to buy the farm.Although she did not ask Lucy anything about it,Marcy,who loved pigs,assumed that the neighbors would be pleased with the pigs being in the area.In a separate contract,Lucy also agreed to sell Marcy a used truck for $5,000.After the contract for the land sale was entered into,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 when 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.Assuming that Lucy fraudulently made a misrepresentation regarding the spring running through the corner of the farm knowing the statement was not correct,considering only the lack of a spring issue,which of the following is true if Marcy does not want to go through with the sale of the farm?

A)Marcy may rescind the contract,and she will recover $10,000 in damages in accordance with the exact statutory amount set by federal law.
B)Marcy may rescind the contract,but she may not recover damages.
C)Marcy may sue for damages regardless of whether she can establish injury,but she may not rescind the contract.
D)Marcy may rescind the contract,and she may also sue for damages if she can establish injury.
E)Marcy may rescind the contract and she may also recover damages,but only nominal damages.

Question 70

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.Weaver reluctantly agrees to rent the apartment to Willy for that amount.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.Finally,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's 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 legal terms indicate(s)Willy's threat to tell friends about the arrest unless Weaver rents the apartment?

A)Duress
B)Unconscionability
C)Fraud
D)Duress,unconscionability,and fraud
E)Duress and unconscionability,but not fraud

Question 71

What is the result of a contract being voidable?

Question 72

Shady lawyer.Brice had a number of ethical issues come up in law school involving alleged cheating but managed to graduate because nothing was ever proven.Upon obtaining his law license,Brice enjoyed living "on the edge" and engaged in tactics that were at least questionable.One of his clients was an older gentleman,Sam,with significant assets and significant legal issues involving a messy divorce stemming from his involvement with a local dog groomer,Susie.Brice told Sam that he felt certain that he could arrange matters so that Sam could live happily in the Caribbean with Susie but that,in addition to paying a hefty legal fee,Sam would need to name Brice as a significant beneficiary in his will and give Brice power of attorney over his assets.Sam agreed to do so.He gave Brice power of attorney and changed his will to reflect that upon his death,Brice would receive half his estate.The other half went to Susie.Sam also paid the hefty legal fee Brice demanded.At that point,Brice agreed to proceed with negotiations in the divorce.Shortly after the divorce,Sam had an unexpected heart attack and died immediately.Susie,the executor of the will,told Brice that she was reporting him to the state bar association and that he was not entitled to any assets from the estate.Brice told Susie that he knew that Susie had failed to pay income tax for all her dog grooming and that he was reporting her unless she kept her mouth shut and consented to the terms of the contract.Brice also said that in return for keeping his mouth shut,he wanted additional sums purportedly for his work on Sam's divorce.Assuming that Sam had paid all amounts validly due from the divorce proceeding,which of the following is true regarding Brice's attempt to obtain additional fees?

A)Brice has caused Susie to experience duress.
B)Brice has unduly influenced Susie.
C)Brice has caused Susie to experience duress and unduly influenced Susie.
D)Brice has committed intentional wrongful disclosure.
E)Brice is not guilty of anything,so long as he used no physical force to obtain Susie's agreement.

Question 73

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.Lucy assured her that a spring ran through one corner of the property.Therefore,Marcy agreed to buy the farm.Although she did not ask Lucy anything about it,Marcy,who loved pigs,assumed that the neighbors would be pleased with the pigs being in the area.In a separate contract,Lucy also agreed to sell Marcy a used truck for $5,000.After the contract for the land sale was entered into,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 when 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.Which of the following would be the result if Marcy attempts to rescind the contract and recover damages only on the basis of the neighbors' objection to a pig farm?

A)Marcy may rescind the contract and recover damages because Lucy made an implied misrepresentation.
B)Marcy may rescind the contract,but she may not recover damages because the situation involved a mutual mistake.
C)Marcy may recover damages,but she may not rescind the contract because Lucy made an implied misrepresentation.
D)Marcy may not rescind the contract or recover damages because Marcy made a unilateral mistake.
E)Marcy may rescind the contract,but she may not recover damages because Marcy made a unilateral mistake.

Question 74

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.Weaver reluctantly agrees to rent the apartment to Willy for that amount.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.Finally,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's 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 would be the most likely result if Weaver attempts to rescind the agreement to rent the apartment?

A)He will be able to rescind the agreement based upon Willy's extortion.
B)He will be able to rescind the agreement based upon the threat to Willy's economic interests.
C)He will be able to rescind the contract because of a misrepresentation.
D)He will not be able to rescind the contract because he agreed to it.
E)He will not be able to rescind the agreement unless he can show that he was not actually convicted of the crime alleged.

Question 75

Maurice contracted with Suzanne to feed and walk her Corgi mix dog,Baby,for $100 while Suzanne was on vacation for one week.One day before Suzanne was to leave,Maurice came over and said that Baby would be a significant amount of trouble and that he would have to receive $150 in order to walk and feed Baby.Suzanne reluctantly agreed.When she returned from vacation,she handed Maurice $100 and refused to pay more.Maurice threatens to take her to small claims court.What would be the likely result?

A)Maurice will lose due to economic duress.
B)Maurice will lose due to undue influence.
C)Maurice will lose because of fraud.
D)Suzanne will lose because she breached the amended contract with Maurice.
E)Suzanne will lose because she breached the amended contract with Maurice,unless she can establish that the prevailing rate for walking and feeding a dog for one week is no more than $100.

Question 76

Shady lawyer.Brice had a number of ethical issues come up in law school involving alleged cheating but managed to graduate because nothing was ever proven.Upon obtaining his law license,Brice enjoyed living "on the edge" and engaged in tactics that were at least questionable.One of his clients was an older gentleman,Sam,with significant assets and significant legal issues involving a messy divorce stemming from his involvement with a local dog groomer,Susie.Brice told Sam that he felt certain that he could arrange matters so that Sam could live happily in the Caribbean with Susie but that,in addition to paying a hefty legal fee,Sam would need to name Brice as a significant beneficiary in his will and give Brice power of attorney over his assets.Sam agreed to do so.He gave Brice power of attorney and changed his will to reflect that upon his death,Brice would receive half his estate.The other half went to Susie.Sam also paid the hefty legal fee Brice demanded.At that point,Brice agreed to proceed with negotiations in the divorce.Shortly after the divorce,Sam had an unexpected heart attack and died immediately.Susie,the executor of the will,told Brice that she was reporting him to the state bar association and that he was not entitled to any assets from the estate.Brice told Susie that he knew that Susie had failed to pay income tax for all her dog grooming and that he was reporting her unless she kept her mouth shut and consented to the terms of the contract.Brice also said that in return for keeping his mouth shut,he wanted additional sums purportedly for his work on Sam's divorce.Which of the following is true regarding Brice's threat to report Susie for tax evasion?

A)Brice has caused Susie to experience duress.
B)Brice has unduly influenced Susie.
C)Brice has caused Susie to experience duress and unduly influenced Susie.
D)Brice has committed intentional wrongful disclosure.
E)Brice has not done anything wrong,assuming Susie truly cheated on her taxes.

Question 77

Shady lawyer.Brice had a number of ethical issues come up in law school involving alleged cheating but managed to graduate because nothing was ever proven.Upon obtaining his law license,Brice enjoyed living "on the edge" and engaged in tactics that were at least questionable.One of his clients was an older gentleman,Sam,with significant assets and significant legal issues involving a messy divorce stemming from his involvement with a local dog groomer,Susie.Brice told Sam that he felt certain that he could arrange matters so that Sam could live happily in the Caribbean with Susie but that,in addition to paying a hefty legal fee,Sam would need to name Brice as a significant beneficiary in his will and give Brice power of attorney over his assets.Sam agreed to do so.He gave Brice power of attorney and changed his will to reflect that upon his death,Brice would receive half his estate.The other half went to Susie.Sam also paid the hefty legal fee Brice demanded.At that point,Brice agreed to proceed with negotiations in the divorce.Shortly after the divorce,Sam had an unexpected heart attack and died immediately.Susie,the executor of the will,told Brice that she was reporting him to the state bar association and that he was not entitled to any assets from the estate.Brice told Susie that he knew that Susie had failed to pay income tax for all her dog grooming income and that he was reporting her unless she kept her mouth shut and consented to the terms of the contract.Brice also said that in return for keeping his mouth shut,he wanted additional sums purportedly for his work on Sam's divorce.Which of the following is true regarding Brice's dealing with Sam?

A)Brice has caused Sam to experience duress.
B)Brice has unduly influenced Sam.
C)Brice has caused Sam to experience duress and unduly influenced Sam.
D)Brice has committed fraudulent misrepresentation and caused Sam to experience duress.
E)Brice has not committed any wrongdoing,unless it can be proven that Sam lacked mental capacity during his transactions with Brice; in that case,Brice has caused Sam to experience duress.

Question 78

Constance was buying a used personal watercraft from Ralph.He told her that the engine on the watercraft was in good shape.Constance agreed to pay Ralph $4,000 for the watercraft.She was going to be out of town on vacation,so Ralph and Constance agreed that when she returned in a week,she would bring over the money and pick up the watercraft.During that week,the manufacturer notified Ralph that the watercraft was being recalled because it had a faulty engine that needed repair.Ralph said nothing about the condition of the engine or the recall when Constance came to pick up the watercraft.They chatted about other matters; she gave him the $4,000,and took the watercraft.Later,Constance started having problems with the watercraft and discovered that Ralph had been notified of the issue with the engine.She asked for a refund accusing Ralph of fraud.Ralph refused on the basis that he did not make any misrepresentation.Who is correct and why? For purposes of this question,assume that sales talk or puffery is not at issue.

Question 79

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.Weaver reluctantly agrees to rent the apartment to Willy for that amount.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.Finally,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's 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 agreement to purchase the car?

A)He will not be able to rescind the contract because Weaver made no affirmative statements.
B)He will not be able to rescind the contract unless he can prove that he expressly asked Weaver if the mileage was run backwards on the car and Weaver failed to reveal that it had been altered.
C)He will not be able to rescind the contract because there is no proof that the mileage alteration affected the car's engine.
D)He will be able to rescind the contract because Weaver caused him duress.
E)He will be able to rescind the contract because of Weaver's fraudulent misrepresentation.