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

Question 1

Reliance on an "expert's" statement of opinion may be the basis for an ac?tion based on fraud.

Answer 1

True

Question 2

Misrepresentation of a material fact can occur through conduct alone.

Answer 2

True

Question 3

A mistake of fact cannot be bilateral.

Answer 3

False

Question 4

Justifiable reliance is an element of fraud.

Question 5

An innocent misrepresentation is not a basis for rescinding a contract.

Question 6

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

Question 7

Scienter refers to a material fact's scientific basis.

Question 8

Only a mistake in value will make a contract voidable.

Question 9

A contract entered into under undue influence is voidable.

Question 10

An innocent party may seek damages for a fraudulent contract.

Question 11

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

Question 12

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

Question 13

An innocent party can rescind a fraudulent contract.

Question 14

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

Question 15

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

Question 16

Misrepresentation of a material fact cannot occur by silence.

Question 17

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 rescind the contract.

Question 18

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

Question 19

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

Question 20

To reform a contract is to rescind it.

Question 21

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

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

Question 22

Yvon,a golf pro,convinces Zach,who has no athletic ability,that he has considerable talent and induces him to pay Yvon $10,000 for golf lessons.When Zach realizes the truth,he files a suit against Yvon.Zach is most likely to recover on the basis of

A)duress.
B)misrepresentation.
C)unconscionability.
D)none of the choices.

Question 23

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 24

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

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

Question 25

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

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 26

Safron threatens physical harm-"you don't want anything to happen to you or your family"-to force Tivoli to sell his business,Umbrellas Unlimited,Inc. ,to Safron for a below-market price.This is

A)a mistake of value.
B)duress.
C)fraud.
D)undue influence.

Question 27

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

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 28

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

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 29

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 30

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

A)liable on the bid.
B)not liable on the bid because Max 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 31

Rowan,a famous chef,sells to Patricia a restaurant that Rowan closed years ago.Patricia discovers in the restaurant a collection of Rowan's recipes,which are considered valuable.In a suit to obtain the recipes,Rowan will likely

A)lose because he should have known the recipes were in the restaurant.
B)lose because the sale of a restaurant includes everything in it.
C)win because there was no voluntary consent to the sale of the recipes.
D)win because the sale of a restaurant includes nothing in it.

Question 32

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

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

Question 33

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

A)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 34

Flem sells an all-terrain,off-road vehicle to Esteban without disclosing that the odome?ter,which reads 30,000 miles,was disconnected 50,000 miles ago.Flem is most likely liable for

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

Question 35

Fact Pattern 14-B1
Gert contracts to sell two tracts of land to Hank.Both parties believe that the two tracts are adjacent,but in fact they are not.Gert is still willing to sell the land,but under these circumstances the deal would adversely affect Hank.
Refer to Fact Pattern 14-B1.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 36

Fact Pattern 14-B1
Gert contracts to sell two tracts of land to Hank.Both parties believe that the two tracts are adjacent,but in fact they are not.Gert is still willing to sell the land,but under these circumstances the deal would adversely affect Hank.
Refer to Fact Pattern 14-B1.Because of the parties' belief about the adjacency of the property,their contract is

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

Question 37

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

A)scam Robin.
B)induce Robin to give him the commission on her next sale.
C)recover damages or rescind the contract to buy the house.
D)sabotage Robin's career with bad publicity.

Question 38

Fact Pattern 14-B3
In selling a house,Robin tells Destry that the wiring and plumbing are of a certain quality.Robin knows nothing about the quality,but it is not as she specifies.Destry buys the house.
Refer to Fact Pattern 14-B3.On learning the truth,Destry confronts Robin,who says she was not trying to fool him-she was only trying to make a sale.This is

A)a mistake of value.
B)fraud.
C)innocent misrepresentation.
D)unconscionable.

Question 39

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 40

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

A)fraud.
B)materiality.
C)mistake.
D)unconscionability.

Question 41

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

Question 42

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