Deck 13: Voluntary Consent

Question 1

To rescind a contract is to cancel it.

Answer 1

True

Question 2

If a price quotation contains a mistake in the adding of a number of figures,the contract may not be enforceable.

Answer 2

True

Question 3

A unilateral mistake of fact will usually enable a party to a contract to avoid it.

Answer 3

False

Question 4

Generally,a unilateral mistake affords the mistaken party a right to relief from the contract.

Question 5

Misrepresentation of an opinion is an element of fraud.

Question 6

A contract is always enforceable even if one party is aware that the other party made a mistake of fact.

Question 7

An innocent party may seek damages for a fraudulent contract.

Question 8

An innocent party can enforce a fraudulent contract.

Question 9

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

Question 10

A general contractor who suspects that a subcontractor's bid is a mistake can still enforce the bid.

Question 11

A mistake of fact can only be bilateral.

Question 12

Overestimating the value of an object is a mistake for which a court will normally provide relief.

Question 13

Only a mistake in value will make a contract voidable.

Question 14

Even if an obvious,significant clerical error exists in a written contract,the contract is enforceable.

Question 15

If the subject matter of a contract turns out to be more valuable than one of the parties believed it would be,that party can cancel the contract.

Question 16

An innocent party can cancel a fraudulent contract.

Question 17

A statement of opinion is generally subject to a claim of fraud.

Question 18

All mistakes of fact are material.

Question 19

A mutual mistake of fact has no effect on the enforceability of a contract.

Question 20

An expert's false statement to a naive buyer about a technical detail may entitle the buyer to rescind a contract.

Question 21

Misrepresentation of a material fact can occur through words alone.

Question 22

Intent to deceive is an element of fraud.

Question 23

Scienter refers to a material fact's scientific basis.

Question 24

Reliance on a misrepresentation is not justified if it is based on an obviously extravagant statement.

Question 25

May is a stockbroker.Due to May's statements,Nora believes that the price of OK!,Inc.,a widely traded stock,is going to increase substantially.Nora buys 500 shares of OK! at $10 per share,but the price soon drops to $2.Nora can successfully recover

A)nothing.
B)the amount of the purchase price.
C)the amount of the purchase price plus the expected increase.
D)the amount of the purchase price plus the unexpected decrease.

Question 26

A contract entered into under duress is voidable.

Question 27

A contract entered into under undue influence is unavoidable.

Question 28

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

Question 29

Nano Corporation offers to sell a robotic device to Opal Assembly, Inc., but mistakenly transposes some of the digits in the price so that $15,400 appears in the offer as $14,500. Opal accepts the written offer.
Refer to Fact Pattern 13-1.Opal's best argument in favor of enforcement of the contract is that

A)a bilateral mistake does not afford relief from a contract.
B)a mistake of value does not afford relief from a contract.
C)a unilateral mistake does not afford relief from a contract.
D)the price was below the prices of comparable devices.

Question 30

To recover for fraud,a plaintiff must be over twenty-one years of age.

Question 31

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

Question 32

Misrepresentation of a material fact cannot occur through conduct alone.

Question 33

An unconscionable contract can occur in a one-sided transaction in which one party has substantially superior bargaining power.

Question 34

Dante,a popular performer,dies.His spouse Caitlin sells their house to Buck.Unknown to Caitlin or Buck,in one of the closets is the master recording of an unreleased album.With respect to this recording,Buck can

A)keep it because Caitlin should have known about it.
B)keep it because the sale of a house includes everything in it.
C)not keep it because there was no voluntary consent to its sale.
D)not keep it because the sale of a house includes nothing in it.

Question 35

Misrepresentation of a material fact can occur through silence.

Question 36

To rescind a contract for fraud,a plaintiff must prove an injury.

Question 37

Lina,an employee of Manual Labor Industries (MLI),is injured in a work-related accident.Based on the diagnosis of Newt,a doctor,Lina accepts $50,000 from MLI and waives the right to future claims.Newt's diagnosis later proves to have been wrong.Newt's misdiagnosis is,in terms of its impact on Lina's agreement with MLI,

A)a mutual mistake of fact.
B)a unilateral mistake of fact.
C)fraud.
D)puffery.

Question 38

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

Question 39

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

Question 40

Nano Corporation offers to sell a robotic device to Opal Assembly, Inc., but mistakenly transposes some of the digits in the price so that $15,400 appears in the offer as $14,500. Opal accepts the written offer.
Refer to Fact Pattern 13-1.Nano's best defense against enforcement of the contract is that Opal knew

A)a bilateral mistake supports the cancellation of a contract.
B)a mistake of value supports the cancellation of a contract.
C)a unilateral mistake supports the cancellation of a contract.
D)the price was below the prices of comparable devices.

Question 41

Darla sells a all-terrain,off-road vehicle to Esteban without disclosing that the odometer,which reads 30,000 miles,was disconnected 50,000 miles ago.Darla is most likely liable for

A)duress.
B)fraud.
C)mistake.
D)nothing.

Question 42

Genie.com initiates an online dating service.To attract subscribers and encourage participation,Genie.com creates and posts profiles of fictitious persons and exaggerated profiles of actual users.Fooled by the false profiles,Ham buys a subscription.He is most likely a victim of

A)undue influence.
B)fraud.
C)mistake.
D)nothing.

Question 43

Moore Properties, Inc., offers in writing to sell to Lawn Acres Development Corporation a certain half-acre of land for "$112,000." After Lawn Acres signs the offer in acceptance and returns it, Moore discovers that the price should have been stated as "$121,000."
Refer to Fact Pattern 13-3.Moore's misstatement of the price is

A)a bilateral mistake.
B)a fraudulent misrepresentation.
C)a unilateral mistake.
D)unconscionable.

Question 44

Grover contracts to sell two tracts of land to Hank. Both parties believe that the two tracts are adjacent, but in fact they are not. Grover is still willing to sell the land, but under these circumstances the deal would adversely affect Hank.
Refer to Fact Pattern 13-2.Because of the parties' belief about the adjacency of the property,their contract is

A)unavoidable.
B)unconscionable.
C)unenforceable.
D)voidable.

Question 45

Olin convinces Pia,who has no artistic ability,that Pia has considerable talent and induces Pia to pay Olin $10,000 for art lessons.When Pia realizes the truth,she files a suit against Olin.Pia is most likely to recover on the basis of

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

Question 46

Grover contracts to sell two tracts of land to Hank. Both parties believe that the two tracts are adjacent, but in fact they are not. Grover is still willing to sell the land, but under these circumstances the deal would adversely affect Hank.
Refer to Fact Pattern 13-2.The parties' belief about the adjacency of the property is

A)a bilateral mistake.
B)a fraudulent misrepresentation.
C)a unilateral mistake.
D)unconscionable.

Question 47

In selling inventory control software to Apex Auto Parts Corporation,Bond tells Apex's purchasing agent that the software is "almost human." This is

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

Question 48

Metro City and Nu Hi-way Construction Company enter into a construction contract that includes six pages of detailed estimates.Later Metro,whose engineer compiled the figures,discovers that some numbers were added incorrectly,but Nu refuses to make changes.Metro may

A)not rescind the contract.
B)rescind the contract on the basis of fraud.
C)rescind the contract on the basis of mistake.
D)rescind the contract on the basis of economic duress.

Question 49

Business Investment Company and Chic Properties,Inc.,contract for the sale of a retail mall.A mutual mistake of fact will make it possible for either party to rescind the contract

A)if the mistake of fact is immaterial.
B)if the mistake of fact is material.
C)under any circumstances.
D)under no circumstances.

Question 50

Roc buys a farm from Steve,who claims that it would be a prime site for a housing subdivision.Roc later learns that the law does not permit the land to be used for housing.Roc may

A)not rescind the contract.
B)rescind the contract only if Roc did not know the law before the deal.
C)rescind the contract only if Steve knew about the law before the deal.
D)rescind the contract only if the law is not common knowledge.

Question 51

Cooper offers to sell Gable his sport utility vehicle (SUV)and says that it has never been in an accident.Relying on Cooper's statement,Gable buys the SUV.Later,when it develops mechanical problems,Gable can

A)not rescind the contract.
B)rescind the contract on the basis of fraud.
C)rescind the contract on the basis of mistake.
D)rescind the contract on the basis of puffery.

Question 52

Leyte believes an old comic book he owns has little value,but Milo is convinced it is a valuable collector's item.Leyte sells it to Milo for $10 before learning it is worth $1,000.Leyte can

A)not rescind the contract.
B)rescind the contract on the basis of fraud.
C)rescind the contract on the basis of mistake.
D)rescind the contract on the basis of puffery.

Question 53

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

A)liable on the bid.
B)not liable on the bid because Vigo misestimated the value.
C)not liable on the bid because the auctioneer misstated the value.
D)not liable on the bid because the object was probably overpriced.

Question 54

Hillside Homes,Inc.,and Ideal Builders,Inc.,enter into a construction contract that includes six pages of detailed calculations.Later Hillside,whose project manager compiled the figures,discovers that some numbers were multiplied incorrectly,but Ideal refuses to make changes.A court would most likely

A)allow the parties to rescind the contract.
B)award damages to Hillside for the mistakes.
C)award damages to Ideal for the mistakes.
D)enforce the contract without requiring changes.

Question 55

Gina induces Hugh to enter into a contract for the purchase of a condominium about which Gina knowingly misrepresents a number of material features.When Hugh discovers the truth,he can

A)not rescind the contract.
B)rescind the contract on the basis of fraud.
C)rescind the contract on the basis of mistake.
D)rescind the contract on the basis of undue influence.

Question 56

Dom,a salesperson for Excel Autos,promises Fern that a certain car will give her a "smooth ride." Dom offers a test drive,which Fern declines.She buys the car but soon realizes that its suspension is in poor condition.Fern

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 57

Jill and Karl contract for the sale of Jill's horse for $1,000.Unknown to either party,the horse has died.Karl is

A)entitled to another horse of equivalent value.
B)not required to pay due to the mutual mistake.
C)not required to pay due to the unilateral mistake.
D)required to pay because he assumed the risk the horse might die.

Question 58

Ralph offers to sell Sophie,who is seventeen years of age,a car about which Ralph intentionally misrepresents several material facts.In reliance on the misrepresentations,Sophie buys the car.To prove fraud in this transaction,Sophie would have to show that

A)Ralph intentionally deceived Sophie.
B)Ralph made statements that were obviously exaggerated.
C)Sophie does not know anything about cars.
D)Sophie is under eighteen years of age.

Question 59

In selling paving stones to Yard & Garden Supply,Trey tells Yard & Garden's buying representative that the stones are "soft as carpet." This is

A)unconscionable.
B)fraud.
C)mistake.
D)puffery.

Question 60

Moore Properties, Inc., offers in writing to sell to Lawn Acres Development Corporation a certain half-acre of land for "$112,000." After Lawn Acres signs the offer in acceptance and returns it, Moore discovers that the price should have been stated as "$121,000."
Refer to Fact Pattern 13-3.The effect of Moore's misstatement of the price will most likely fall on

A)Moore and Lawn Acres,who must split the difference.
B)Moore only.
C)Lawn Acres only.
D)neither Moore nor Lawn Acres.

Question 61

Don is an elderly man who lives with his nephew Evan.Don is dependent on Evan for care.Evan advises Don to "invest" in Evan's "professional gambling" venture.Evan tells Don that he will no longer provide care unless Don makes this investment.Don liquidates his other investments,signs a contract with Evan,and gives him the funds.Can Don set aside this contract

Question 62

Augustus,who is Bertha's guardian,convinces her to buy a certain parcel of land from Christy at a greatly inflated price.Augustus may be liable for

A)mistake.
B)puffery.
C)unconscionability.
D)undue influence.

Question 63

Pete,the owner of Quality Orchards,contracts to sell fruit to Ripe Produce,Inc.When Pete refuses to perform,Ripe Produce files a suit to enforce the contract.To defend successfully on the ground of unconscionability,Pete must show that enforcement of the contract would be

A)economically meaningless.
B)legally worthless.
C)manifestly unfair or oppressive.
D)undeniably valuable.

Question 64

Flo enters into a contract under Gail's threats. Later, Flo refuses to perform, claiming that she acted under duress.
Refer to Fact Pattern 13-4.Gail sues to enforce the contract.To be guilty of duress,Gail must have threatened

A)a civil suit.
B)a lost opportunity.
C)a social snubbing.
D)a wrongful act.

Question 65

Noddy threatens physical harm to force Odell to sell his business,Pasta Palace,Inc.,to Noddy for a below-market price.This is

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

Question 66

Lacy uses undue influence to induce Mina to sign a contract to invest her National Education Fund student loan money in Overseas Bank.Mina may

A)avoid the contract.
B)do nothing after Mina signs the contract.
C)recover from National for a failure to monitor Mina's money.
D)recover from Overseas for a failure to undo Lacy's influence.

Question 67

Multi Investments,Inc.,offers to buy Nano Toy Corporation.On May 1,Nano provides copies of its financial statements for the previous 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 financial statements,buys Nano.On June 10,the buyer discovers the inventory overstatement.Can Multi succeed in a suit against Nano for fraud

Question 68

In negotiating a contract with Mikayla for the use of an empty bottling plant to bottle and market natural spring water,Nero makes a statement that he believes not to be true with respect to a material fact in the deal.Nero is guilty of

A)a mistake.
B)fraud.
C)puffery.
D)nothing.

Question 69

Daphne,an accountant,uses undue influence to induce her client Emily to invest in Faux Plastico,Ltd.,a business with little potential.When Emily learns the truth,she can

A)do nothing.
B)enforce the contract but not rescind it.
C)enforce the contract or rescind it.
D)rescind the contract but not enforce it.

Question 70

Dale files a suit against Eve,alleging that she used fraud to induce him to enter into a contract with her.Proof of an injury is required

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

Question 71

Flo enters into a contract under Gail's threats. Later, Flo refuses to perform, claiming that she acted under duress.
Refer to Fact Pattern 13-4.Flo sues to rescind the contract.Gail claims that duress is a defense to enforcement of a contract,not a ground for rescission.The court will probably rule in favor of

A)Flo only.
B)Flo and Gail.
C)Flo or Gail,but not both.
D)Gail only.

Question 72

Gregor uses duress to force Honi to agree to pay him for protecting Honi's Coffee Shop against vandalism and destruction.Honi may

A)avoid the contract or choose to carry it out.
B)do nothing once she has agreed to pay.
C)recover from her insurer for a failure to direct her "protection."
D)recover from the local police for a failure to protect her "direction."