Deck 17: Legal Assent

Question 1

Intent to deceive may not be inferred when a fraudulent misrepresentation is at issue.

Answer 1

False

Question 2

It is not necessary to show reliance to prove fraudulent misrepresentation.

Answer 2

False

Question 3

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

Answer 3

False

Question 4

If both parties are mistaken about a material fact,the mutual mistake does not void the contract.

Question 5

A voidable contract may be ________.

A)Chargeable
B)Deassented
C)Rescinded
D)Reassented
E)Uncharged

Question 6

involves a promise to buy or sell that the courts will require the parties to obey.

A)Bilateral assent
B)Legal assent
C)Contractual affirmance
D)A special agreement
E)Legal affirmance

Question 7

Mistakes in contract law result from untrue statements made by one party to the contract.

Question 8

The active hiding of the truth about a material fact is called nondisclosure.

Question 9

The statement of fact need not be an actual assertion for fraudulent misrepresentation to be the basis for a contract rescission.

Question 10

Both European and U.S.courts will interfere with a contract just because the value of the item in question has changed since the agreement.

Question 11

Without legal assent a contract may be ________.

A)Void
B)Voidable
C)Illegal
D)Unmarketable
E)Unchargeable

Question 12

Which of the following was the result on appeal in the Case Opener involving the claim that Michael Jordan owed $5 million based on his agreement to pay the plaintiff's mother on the premise that he was the father,although it was later determined that the child was not his?

A)That the agreement to pay $5 million could be rescinded based on a mutual mistake of fact.
B)That the agreement to pay $5 million could not be rescinded because Jordan waited too long in which to complain about the contract.
C)That the agreement to pay $5 million could be rescinded based on the mother's fraud.
D)That the agreement to pay $5 million could be rescinded based on either a mutual mistake of fact or based on the mother's fraud.
E)That the agreement to pay $5 million could not be rescinded because Jordan was aware of a question about his parentage.

Question 13

Fraudulent misrepresentation and intentional misrepresentation are not the same thing.

Question 14

An erroneous belief about the facts of the contract at the time the contract is concluded is called a mistake of fact.

Question 15

The rules about legal assent were developed to make business transactions smoother and more dependable.

Question 16

Zara and Wahid have a lot of money invested with a stockbroker named Dion and also with other brokers.Zara and Wahid decided to divorce.Zara was really interested in investments,so the divorce decree provided that Zara would retain "all investment accounts," and Wahid would receive a "cash settlement" from funds the parties had in the bank.Six months after the divorce was final,it was discovered that Dion had absconded to parts unknown with all the money invested with him.Zara could have withdrawn the funds at the time of the divorce,before Dion left town,but she had no reason for concern and left the funds there for investment purposes.After discovering Dion's wrongdoing,Zara asked Wahid 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?

A)The original divorce agreement will be rescinded,and the parties will be required to renegotiate the agreement because,regardless of whether or not Dion was guilty of fraud,the end result is that Zara did not receive the benefit of her bargain.
B)The original divorce agreement will be rescinded,and the parties will be required to renegotiate the agreement because Zara and Wahid were mutually mistaken in regard to investing with Dion.
C)The original divorce agreement will be rescinded,and the parties will be required to renegotiate the agreement because the investment accounts with Dion were a significant basis of the divorce agreement,and Dion's fraud caused termination of that contract.
D)The original divorce agreement will be enforced only in part because based on their mutual mistake in regard to investing with Dion,the parties will be required to renegotiate the part of the contract involving the investments with Dion.
E)The original divorce agreement will be enforced.

Question 17

For fraudulent misrepresentation to be the basis for a contract rescission,the statement of fact must be an actual assertion.

Question 18

Scienter is present when the party accused of making the fraudulent assertion believed that the assertion was false or made the claim without any regard for whether it was true or false.

Question 19

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

Question 20

Undue influence refers to those special relationships in which one person has taken advantage of his or her dominant position in a relationship to unduly persuade the other person and interfere with that person's ability to make his or her own decision.

Question 21

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

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

Question 22

Regarding European courts,which statement is true?

A)European courts permit rescission of the contract for a mistake of value when the mistake involves more than 40 percent of the value at the time of the contract.
B)European courts refuse to assume that parties accept the risk when they make a contract that the value might change later.
C)European courts are in total disagreement with the reluctance of American courts to interfere with a contract because the value of the item in question has changed since the agreement.
D)European courts permit rescission of the contract for a mistake of value when the mistake involves more than 50 percent of the value at the time of the contract.
E)European courts permit rescission of the contract for a mistake of value when the mistake involves more than 10 percent of the value at the time of the contract.

Question 23

Which of the following is true on appeal regarding the case of Mary W.Scott v.Mid-Carolina Homes Inc. ,discussed in the "Case Nugget" in which the plaintiff sued to recover damages after a salesperson allegedly mistakenly agreed to sell a mobile home to her for a price that was too low,later told her the mobile home could not be sold because of a bent frame,and then proceeded to sell it for a higher price to other buyers?

A)The court refused to find that the defendant had the right to rescind the contract because a mutual mistake was involved.
B)The court found that the defendant had the right to rescind the contract because,even though the salesperson acted questionably,the plaintiff had not made a down payment.
C)The court ruled that the defendant had the right to rescind the contract because a mutual mistake was involved.
D)The court ruled that the defendant had the right to rescind the contract because a unilateral mistake was involved.
E)The court refused to find that the defendant had the right to rescind the contract based on the alleged unilateral mistake.

Question 24

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

A)Scienter misrepresentation
B)Fraudulent misrepresentation
C)Acknowledged misrepresentation
D)Negligent misrepresentation
E)True misrepresentation

Question 25

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

A)Courts look to determine whether a mistake of fact occurred when an advertisement was made.
B)Courts look to determine whether a mistake of fact occurred at the time the contract was concluded.
C)Courts look to determine whether a mistake of fact occurred after the contract was concluded.
D)Courts look to determine whether a mistake of fact occurred during contract negotiations.
E)Courts look to determine whether a mistake of fact occurred when the initial offer was made.

Question 26

Which of the following is true regarding the effect of an innocent misrepresentation on a contract?

A)The contract is automatically void and of no effect,and the party who was misled may recover damages.
B)It permits the party that was misled by the false statement to rescind the contract,but damages are not available.
C)It permits either the party that was misled by the false statement or the party who made the false statement to rescind the contract.
D)It permits either the party that was misled by the false statement or the party who made the false statement to rescind the contract,and it also makes the contract void and of no effect.
E)It permits the party who made the false statement to rescind the contract.

Question 27

When a person who makes a misrepresentation has no knowledge about the falsity of the claim,it is said that the person lacked ________.

A)Scienter
B)Plotting
C)Information
D)Premeditation
E)Planning

Question 28

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

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

Question 29

Which of the following refers to special relationships 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)Pressing dominance
C)Relationship dominance
D)Undue influence
E)Pressing persuasion

Question 30

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

A)Negligence
B)Masking
C)Concealment
D)Nondisclosure
E)Veiling

Question 31

Although there are some exceptions,a[n] ________ mistake does not generally void a contract.

A)Clear
B)Unclear
C)Mutual
D)Single
E)Unilatera l

Question 32

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

A)Because it determines which contracts lack consideration.
B)Because it determines how much may be awarded in damages under a contract.
C)Because it determines whether punitive damages may be awarded.
D)Because it determines which contracts are voidable.
E)Because it determines which contracts are considered fraudulent.

Question 33

Either party can choose to ________ the contract in cases where both parties to a contract are mistaken about either a current or a past material fact.

A)Refute
B)Confirm
C)Rescind
D)Disclaim
E)Uphold

Question 34

What is absent when a mistake of fact occurs?

A)Legal coherence
B)Legal assent
C)Bilateral understanding
D)Contractual concurrence
E)Joint reasoning

Question 35

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.

A)False
B)Illegal
C)Misleading
D)Wrongful
E)Innocent

Question 36

In China which of the following is true regarding the treatment of fraudulent misrepresentations by outsiders?

A)Outsiders have been fined heavily and refused permission to enter into more agreements with Chinese firms.
B)Outsiders have been prohibited from doing further business with Chinese firms but not fined because of the country's concern with its reputation with foreign investors.
C)Outsiders have been fined but by law are allowed to continue operation in the country because of the country's concern with joint ventures.
D)Outsiders are jailed for at least 20 years by law.
E)Outsiders are jailed for at least 10 years,fined heavily,and have all property confiscated.

Question 37

Which of the following refers to an intentional failure to provide pertinent information about a projected contract?

A)Secretion
B)Concealment
C)Entombment
D)Nondisclosure
E)Negligence

Question 38

A mistake that is shared by both parties to an agreement is a[n] ________ mistake.

A)Unclear
B)Double
C)Clear
D)Unilatera l
E)Mutual

Question 39

The result of an error by one party about a material fact is a[n] ________ mistake.

A)Clear
B)Unclear
C)Unilatera l
D)?Mutual
E)Single

Question 40

Which of the following was the result on appeal in the case of Evan Rothberg v.Walt Disney Pictures,the case in the text in which the defendant allegedly used undue influence to obtain a release of employee benefits from a person in the hospital dying of AIDS?

A)The court ruled that a jury question was presented as to whether undue influence was present.
B)The court ruled that the plaintiff was entitled to recover as a matter of law because there was sufficient proof of undue influence.
C)The court ruled that the defendant was rightfully entitled to a summary judgment ruling in its favor because there was no direct evidence of application of excessive pressure by the stronger party.
D)The court ruled that the defendant was rightfully entitled to a summary judgment ruling in its favor because there was no direct evidence of legal undue susceptibility on the part of the weaker party.
E)The court ruled that the defendant was subject to summary judgment because the employer/employee relationship was present when the benefits at issue were granted,and no action for undue influence could later be brought against the employer.

Question 41

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

A)Consideration
B)Knowledge
C)Realization
D)Free will
E)Specifics

Question 42

Monica and Omar talk about the fact that a new teacher is being hired for business law at their school.Omar mentions that he does not yet have a book,and Monica agreed to sell Omar a used business law book for $30 for the upcoming semester.When the new semester begins,the new business law teacher announces that a new custom business law text will be used that is only available in the campus bookstore.Omar wants a refund.Which of the following is Monica's best defense?

A)That only a unilateral mistake was involved on Omar's behalf because Monica was aware of the change and that,therefore,Omar is not entitled to a discharge.
B)That a mutual mistake was involved and that Omar is,therefore,not entitled to a refund.
C)That she did not commit fraud and that,therefore,Omar is not entitled to rescission.
D)That transactions involving goods are not subject to the defense of mistake.
E)That Omar knew of the change of teacher and bore the risk of mistake.

Question 43

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

A)Duress
B)Negligence
C)Browbeating
D)Coercion
E)Fraud

Question 44

Which of the following was the result in the case in the text,Fantastic Sams Salons Corp.v.PSTEVO,LLC and Jeremy Baker,in which the court considered PSTEVO's counterclaim for fraudulent misrepresentation with regard to a franchise agreement?

A)The counterclaim was dismissed because the disclaimer in the contract prohibited defendants from filing a claim.
B)The counterclaim was dismissed even though the disclaimer was invalid.
C)It is illegal to force a party to sign a disclaimer about representations made,and thus defendants were allowed to proceed with their counterclaim.
D)The disclaimer was invalid and thus defendants were allowed to proceed with their counterclaim.
E)The counterclaim was dismissed because,in response to a disclaimer in the contract,defendant affirmed that certain representations were not made.

Question 45

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

A)Durable fraud
B)Duress
C)Undue influence
D)Coercion
E)Criminal influence

Question 46

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)Contractual duress
B)Specific duress
C)Negligent duress
D)Fraudulent duress
E)Economic duress

Question 47

Which statement would be the result if Jen attempts to rescind the contract and recover damages only on the basis of the neighbor's objection to a pig farm?

A)Jen may rescind the contract and recover damages because Monique made an implied misrepresentation.
B)Jen may rescind the contract but may not recover damages because Monique made an implied misrepresentation.
C)Jen may not rescind the contract nor may she recover damages because she,Jen,made a unilateral mistake.
D)Jen may rescind the contract but may not recover damages because she,Jen,made a unilateral mistake.
E)Jen may recover damages but may not rescind the contract because Monique made an implied misrepresentation.

Question 48

Which of the following occurs in Australia whenever an illegitimate threat is made to hold on to goods unless a payment is made or an agreement is entered into?

A)Duress of trade
B)Duress of goods
C)Duress of merchandise
D)Unreasonable duress
E)Unconscionable duress

Question 49

[Scheming 'Friends'] Richard wants to rent a basement apartment in Eric's home.Richard threatens to tell Eric's parents that Eric had been arrested for illegally smoking marijuana unless Eric rents the apartment to him for $100 per month.The information regarding the arrest is true. )Eric reluctantly agrees to rent the apartment to Richard for $100 per month.Richard also wants to buy Eric's car.Eric runs back the odometer on the car before Richard looks at it.Richard is impressed by the low mileage and agrees to buy the car.Eric offers to sell Richard a ring for Richard's fiancée.Eric tells Richard that the ring is a diamond and believes that to be true.After the deal is made,however,a jeweler friend of Eric informs him that the ring is a fake.When Richard shows up with the money,Eric says nothing.He just hands Richard the ring and takes the money.Later,Richard finds out that the odometer was run backwards from another friend in whom Eric confided.Richard also finds out from his girlfriend that the ring is a fake.
Which of the following is Richard guilty of in threatening to tell Eric's parents about the arrest unless Eric rents the apartment?

A)Undue influence
B)Fraud
C)Duress
D)Consumer misbehavior
E)Unconscionability

Question 50

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

A)Jen may rescind the contract,but she may not recover damages.
B)Jen may sue for damages,but she may not rescind the contract.
C)Jen may rescind the contract and recover compensatory damages.
D)Jen has no remedy based on an innocent misrepresentation based on the theory that she should have checked more closely before entering into the contract.
E)Jen may rescind the contract,or she may keep the contract and sue for damages.

Question 51

As described in the text,which statement is true regarding consumers and Japanese law?

A)The Civil Code has more lax requirements regarding fraud than the country's Consumer Contracts law.
B)In order to encourage economic advancement and international investment,the goal is to form the law so that in litigation consumers are at a distinct disadvantage in comparison to businesses.
C)Japanese law does not recognize rights of consumers as the buyer must beware.
D)A special Consumer Contracts Law was developed to place consumers and businesses on a more equal footing in transactions.
E)The goal in regard to consumers is to form the law so that in litigation businesses are at a distinct disadvantage in regard to consumers.

Question 52

What would be the most likely result if Eric attempts to rescind the agreement to rent the apartment?

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

Question 53

The reasoning in innocent misrepresentation cases resembles the reasoning in a[n] case.

A)Mutual mistake
B)Duress
C)Negligent misrepresentation
D)Fraudulent misrepresentation
E)Unilateral mistake

Question 54

Which is the correct legal term,if any,for Eric's action in regard to running back the odometer?

A)Active duress.
B)Conscious disregard.
C)Concealment.
D)Nondisclosure.
E)There is no legal term because although he acted illegally,Richard had no duty to disclose his action and incriminate himself.

Question 55

Valerie promised to buy Nicole's car for $2,000.Nicole drew up the contract providing that the exchange would occur the next week.Unfortunately,Nicole was not very good with the keyboard and typed in $1,200 as the price of the car.Valerie noticed that the contract said $1,200,not $2,000,and was very pleased.She signed it without saying anything.When it was time to make the exchange,Valerie gave Nicole $1,200.In response to Nicole's inquiry regarding an additional
$800,Valerie pulled out the contract and showed her that it said $1,200.Nicole immediately responded that she had made a typographical error.Valerie said that there was no mistake on her part because she knew exactly what she was doing and that she thought that Nicole had decided to give her a deal on the car.Which of the following is Nicole's best argument for a rescission of the contract?

A)That because a bilateral contract,as well as a unilateral mistake was involved,most courts would grant relief.
B)That duress was involved because of Valerie's wrongful behavior.
C)That a unilateral mistake was involved and that courts typically allow relief in situations involving unilateral mistakes as opposed to mutual mistakes.
D)That the mistake resulted from a sale of goods,as opposed to the provision of services,and that courts are more likely to grant relief for a mistake when actual physical work is not involved.
E)That the mistake resulted from an accidental clerical error and that it would be unconscionable to enforce the contract.

Question 56

Which result is most likely in the dispute between Jen and Monique regarding which used truck was sold,assuming that both Jen and Monique were innocently mistaken and did not intend to defraud the other?

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

Question 57

One way to prevent a claim of misrepresentation is to add a[n] to a contract.

A)Consideration
B)Specific Anti-Misrepresentation Clause
C)Legal assent
D)Scienter clause
E)Disclaimer

Question 58

Which statement is true if Jack seeks to rescind the contract for the sale of the Mustang?

A)Jack may not rescind the contract because truth is involved.
B)Jack may rescind the contract on grounds of defamation.
C)Jack may rescind the contract on grounds of duress.
D)Jack may rescind the contract on grounds of fraud.
E)Jack may rescind the contract on grounds of misappropriation of name or likeness.

Question 59

[Cheap Motorcycle] Jack,an unpleasant,disagreeable,business law teacher,notices that a student,Liam,who is past the age of majority,has a nice motorcycle for sale.Liam has struggled through school,is in his last semester,and needs to pass business law in order to graduate.Jack tells Liam that he would like to see Liam 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.Liam asks if Jack is serious about the price,and Jack replies,"I have the power here! Take it or leave it!" Jack proceeds to draw up a contract for the sale of the motorcycle for $100 which Liam signs.Liam does some research and finds that Jack has had several arrests for driving under the influence in a nearby town.As an act of revenge,Liam tells Jack that unless Jack sells Liam his new Mustang convertible for $50,he will send a letter about the arrests to the school newspaper.Jack reluctantly agrees to the deal.
What is true if Liam seeks to rescind the contract for the sale of the motorcycle?

A)Liam may rescind the contract on grounds of undue influence or on grounds of duress.
B)Liam may rescind the contract on the ground that although he is past the age of majority,he is still a student.
C)Liam may rescind the contract on grounds of duress.
D)Liam may rescind the contract on grounds of fraud or on grounds of duress.
E)Liam may not rescind the contract.

Question 60

Assuming that Monique made a fraudulent 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 Jen does not want to go through with the sale?

A)Jen must allow Monique an opportunity to cure,or fix,the problem;and in the event that is not done,she may not rescind the contract although she can sue for damages.
B)Jen may rescind the contract,or she may keep the contract and sue for damages.
C)Jen may sue for damages,but she may not rescind the contract.
D)Jen may rescind the contract,but she may not recover damages.
E)Jen may rescind the contract and recover compensatory damages.

Question 61

Which of the following is an example of non-disclosure?

A)Justin removes 25,000 miles from his odometer.
B)Justin changes quality control paperwork to show a shipment has passed inspection.
C)Justin places a carpet over mold in his basement.
D)Justin permits a shipment of hair dryers which did not pass quality control testing.
E)Justin checks the "no" box on a form asking if the house being sold had ever flooded.

Question 62

What must Ky show in order to meet the third requirement necessary to prove mutual mistake?

A)That enforcement of the contract would have an adverse effect on both parties.
B)That failure to enforce the contract would have an adverse effect on only one party.
C)That enforcement of the contract would not have an adverse effect on either party.
D)That failure to enforce the contract would have an adverse effect on both parties.
E)That enforcement of the contract would have an adverse effect on the party who did not agree to bear the risk of mistake.

Question 63

Which of the following is false about the concepts of mistake and misrepresentation?

A)Unlike mistake,misrepresentation involves an untruthful assertion of material fact by one of the parties.
B)Both mistake and misrepresentation scenarios can be unilateral or mutual.
C)Unlike misrepresentation,mistake involves an untruthful assertion of material fact by one of the parties.
D)Unlike mistake,in misrepresentation,only one party is in error about a material fact.
E)Unlike misrepresentation,in mistake,only one party is in error about a material fact.

Question 64

In which of the following examples would a court be least likely to find that nondisclosure has the same legal effect as an actual false assertion?

A)Despite the state's mandatory disclosure law,Vito fails to mention the mold in his basement.
B)The contract involves a sale of a car with bad brakes.
C)One of the parties to the contract is the other's doctor.
D)Caroline fails to inform Vito of the recent outbreak of rust on her "rust-free" car that Vito had already agreed to purchase.
E)Vito permits magazines orders to ship that are missing some pages.

Question 65

[Elton's Electronics] Elton's Electronics sells electronic housewares.Elton is looking for a new supplier to produce the standard-sized switchplate for its best-selling blender.He contacts Porter and provides Porter with specifications for where the switches on the switchplate should be placed.Porter provides excellent pricing and delivery terms,which would save Elton a lot of money.Elton and Porter sign a contract for Porter to produce 10,000 standard-sized switchplates according to Elton's specifications.When the completed switchplates arrive,Elton's employees attach them on the face of the blender,however,the standard-sized switchplates are two millimeters too long.Elton is furious and calls Porter,who says Elton can send back the switchplates and Porter's company can re-work them,but there will be a fee because the switchplates he shipped were "standard-size" switchplates,as specified in the contract.Elton disagrees and hangs up the phone.Elton's technician measures both the switchplates and the blender and discovers that the blender face where the switchplate is attached is two millimeters shorter than the well-known,"standard-size" switchplate.The technician suggests they could shave off two millimeters from Porter's boards to make them fit on the blenders,however,it would be a lot of work.
Which of the following best describes Elton's situation?

A)Mutual mistake,because both parties were mistaken about the standard-size switchplates to be delivered under the contract.
B)Duress,because Porter knows much more about the standard size for switchplates in the industry than Elton.
C)Fraudulent misrepresentation,because Elton justifiably relied on a false statement by Porter.
D)Unilateral mistake,because Elton was mistaken about the size of the switchplates he needed for his blenders.
E)Negligent misrepresentation,because Porter should have known that the standard-size may not work for everyone.

Question 66

For a valid contract,courts insist on a .

A)contractual meeting.
B)mutual meeting.
C)meeting of the minds.
D)meeting of the parties.
E)meeting of assent.

Question 67

Which of the following statements is least likely to support the suggestion of Elton's technician about shaving down the switchplates and using them,instead of rescinding the contract?

A)If the contract is rescinded,Elton's Electronics would not have any switchplates for the blenders.
B)If the contract is rescinded,Porter will probably not want to do business with Elton again.
C)A rescinded contract is time-consuming.
D)If the contract is rescinded,we would "win" against Porter.
E)A rescinded contract is expensive.

Question 68

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

A)Kami should win because Madison's unilateral mistake does not void the contract.
B)Kami should win because mistaken beliefs about the subjective value of an item do not affect the validity of a contract.
C)Madison should win because there was a mistake of fact at the time the contract was entered.
D)Madison should win because mistaken beliefs about the subjective value of an item can affect the validity of a contract.
E)Madison should win because there was a unilateral mistake of fact.

Question 69

Is Elton likely to be successful in a lawsuit that seeks to void or rescind the contract?

A)Yes,because a unilateral mistake voids a contract.
B)No,because courts rarely allow rescission in cases of a mutual mistake.
C)Yes,because both parties were mistaken about what constitutes a "standard-size" switchplate,and where there was a mutual mistake,either party may choose to rescind the contract.
D)Yes,because it was a mistake of fact.
E)No,because only Elton,not Porter,was mistaken about what constitutes a "standard-size" switchplate,and a unilateral mistake generally does not void a contract.

Question 70

Is Ky correct in claiming that the mistake in the division of the accounts is material?

A)Yes,because only one party must show that the mistake was not what was intended.
B)No,because the mistake was in the financial information.
C)Yes,because Ty made a mutual mistake.
D)Yes,if it was a basis for Ky's agreeing to enter into the contract.
E)No,because the mistake is not mutual since only Ty,and not Roland,was adversely affected.

Question 71

Which statement is true regarding Richard's rights in regards to the ring purchase?

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

Question 72

[Everlasting roses] Wanda's gardener claims that if she will pay him to apply a special treatment to her roses each week,the roses would never die.Wanda pays the gardener $25 each week for the special treatment.After a year,her favorite rosebush dies.
Does Wanda have a valid claim for fraudulent misrepresentation?

A)Yes,because she relied on the false statement and the gardener intended to deceive her.
B)Yes,but only if she relied on the false statement.
C)No,because Wanda knew or should have known by the extravagance of the claim that the statement about the roses never dying was false.
D)No,unless she can prove the gardener intended to deceive her.
E)Yes,but only if the false statement is material to the contract.

Question 73

Which of the following theories involve scienter?

A)Fraudulent misrepresentation,intentional misrepresentation.
B)Mutual mistake only.
C)Fraudulent misrepresentation only.
D)Innocent misrepresentation,mutual mistake.
E)Innocent misrepresentation,fraudulent misrepresentation.

Question 74

Which statement is true regarding Richard's rights in regards to the car purchase?

A)He will not be able to rescind the contract unless he can prove that he expressly asked Eric if the mileage was run backwards on the car,and Eric failed to reveal that the odometer had been altered.
B)He will be able to rescind the contract because of the fraudulent misrepresentation on the part of Eric.
C)He will be able to rescind the contract because of duress practiced by Eric.
D)He will not be able to rescind the contract because Eric made no affirmative statements.
E)He will not be able to rescind the contract because the mileage alteration did not affect the engine of the car.

Question 75

Can consumers take legal action against a company for misrepresentation of their products?

A)Consumers cannot sue companies for misrepresentation of their products.
B)Yes,if marketing materials,such as advertising,product labels,and packaging,are seen as misrepresenting what a product truly is or what benefits the product offers.
C)Yes,but one cannot sue for inaccurate packaging or product labels.
D)Consumers can only sue companies for misrepresentation of their products when there is a statute or public policy in place.
E)Yes,but only if the product labels misrepresent what the product offers.

Question 76

Which of the following examples would a court be least likely to find that nondisclosure has the same legal effect as an actual false assertion?

A)The contract involves a sale of a car with bad brakes.
B)Vito permits an order to ship that did not pass quality testing.
C)Caroline fails to inform Vito of the recent outbreak of rust on her "rust-free" car that Vito had already agreed to purchase.
D)Despite the state's mandatory disclosure law,Vito fails to mention the mold in his basement.
E)One of the parties to the contract is the other's doctor.

Question 77

Under which of the following scenarios would a court most likely invalidate the contract with Porter?

A)If Porter knew the "standard-size" switchplates were not the proper size for Elton's blenders,and Elton's mistake in calculating the size needed was a clerical error.
B)If Elton assumed the switchplate was the standard size.
C)If Elton's mistake in measuring the size of the switchplate needed was a clerical error.
D)If Elton's technician "eyeballed" the size needed for the blender.
E)If Elton wrote the wrong switchplate size in an email to Porter and that size was the same as the standard size.

Question 78

Courts find negligent misrepresentation only when the party making the false statement ________.

A)should have known the truth using the skills and competence required of a person in his position or profession.
B)should have known the truth.
C)should have known the truth using the skills and competence required of regular person.
D)verified the truth and negligently continued with the false statement.
E)should have known he or she was committing negligent.

Question 79

What effect might the disclaimer have on Ky's claim?

A)The disclaimer would have no effect since disclaimers in contracts are against public policy.
B)The disclaimer would likely prevent Ky's claim but only if the disclaimer was mutual.
C)The disclaimer would prevent Ky's claim because Ky affirmed that he had reviewed the spreadsheet.
D)The disclaimer would likely not prevent Ky's claim because the spreadsheet was based on erroneous information and Ky did not affirm that the information in the spreadsheet was correct.
E)The disclaimer would prevent Ky's claim because he signed it.

Question 80

Is the impact of negligent misrepresentation the same as that for fraudulent misrepresentation?

A)Yes,they are identical.The contract can be rescinded.
B)No,in fraudulent misrepresentation,the contract is void.In a case of negligent misrepresentation,the contract can be rescinded.
C)No,in negligent misrepresentation,the contract is void.In a case of fraudulent misrepresentation,the contract can be rescinded.
D)Yes,they are identical.The contract can be rescinded,but the mislead party cannot sue for damages.
E)Yes,they are identical.The contract is void as a matter of law.