Question 1

There are two distinct types of fraud.

Accepted Answer

A) True 
 B)False  True

Question 2

Samuel is given papers to sign while planning for his daughter's wedding.  The papers are clearly and accurately the invoices for the food, service, and decorations. He agrees to these charges.  Underneath the invoices, however, are a carbon and a contract of sale for a portion of the failing catering business. When  Samuel signs the top papers, his signature is transferred to the sales contract. This deception automatically voids both the contract for food, service and decorations as well as the hidden sales contract.

Accepted Answer

A) True 
 B)False  False

Question 3

To obtain relief for negligent or innocent misrepresentation, the elements of fraud must be present but the misrepresentation need not be material.

Accepted Answer

A) True 
 B)False  False

Question 4

The remedies of damages and rescission are not available for:

Accepted Answer

A)   concealment.
B)   silence in an arms-length transaction.
C)   innocent misrepresentation
D)   negligent misrepresentation .

Question 5

Contracts induced by threats of __________ are voidable, regardless of whether the coerced party has committed an unlawful act.

Accepted Answer

A)   civil prosecution
B)   criminal prosecution
C)   tortious conduct
D)   a lawsuit to recover a debt

Question 6

Adam wants to buy a six-passenger car. The salesman tells him that the two-seat sports car Adam sees on the car lot would be just perfect for six people. Adam test drives the car and then buys it.

Accepted Answer

A)   Adam has a valid cause of action for fraud.
B)   Adam is not entitled to relief based on fraud because he was not justified in relying upon the salesman's representation that the car would seat six people.
C)   The element of scienter is missing in this fact situation.
D)   The salesman is in a confidential relationship with Adam.

Question 7

Physical compulsion and improper threats are the two basic types of duress.

Accepted Answer

A) True 
 B)False

Question 8

Anita tells Murray she will hit him in the head with a golf club unless Murray signs a contract agreeing to pay Anita $14,000 for her golf cart, which is only worth $4,000. Because of the threat, Murray signs the contract.

Accepted Answer

A)   This contract is voidable at Murray's option.
B)   Anita has committed physical duress against Murray .
C)   This is an example of economic duress since the price is far too high for the golf cart.
D)   Anita has committed assault and battery against Murray .

Question 9

Which of the following would be considered to be a misrepresentation of a material fact for purposes of establishing fraud in the inducement?

Accepted Answer

A)   A statement of value, such as "This is the best car in town for the money."
B)   "This style of jacket is going to be the most popular style next year."
C)   "This car has a new radiator."
D)   "In my opinion, this is the best buy for the money."

Question 10

Give an example of each of the following: 
a. Unilateral mistake 
b. Mistake in the meaning of a contract term.

Accepted Answer

The answer of Give an example of each of the...

Question 11

What elements need to be proved to establish each type of fraud?

Accepted Answer

The answer of What elements need to be proved to...

Question 12

Define and discuss the concept of materiality in relation to misrepresentation

Accepted Answer

The answer of Define and discuss the concept of materiality...

Question 13

If Lucas paid $150 for his vehicle taxes because that is what he was told he owed, then later finds out he only owed $50, he should be able to recover the $100 because this was a unilateral mistake of fact.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following results in a void contract?

Accepted Answer

A)   Duress by improper threat.
B)   Duress by physical force.
C)   Undue influence on a party.
D)   Fraud in the inducement.

Question 15

Relationships that may lead to a court's careful scrutinization of contracts between the parties to make sure undue influence was not present include all but:

Accepted Answer

A)   agent and principal.
B)   salesperson and customer.
C)   parent and child.
D)   doctor and patient.

Question 16

Generally, whether or not the parties deal at arm's length does not affect whether silence alone amounts to fraud.

Accepted Answer

A) True 
 B)False

Question 17

An arm's length transaction is one in which the parties owe each other no special duties and each is acting in his or her self-interest.

Accepted Answer

A) True 
 B)False

Question 18

What are the two types of fraud and what is the effect of each on the contract involved? Give an example of each type of fraud.

Accepted Answer

The answer of What are the two types of fraud...

Question 19

Al owns a farm that he believes is worth $150,000. Betty knows that there is oil under the farm and offers Al $160,000 for it. Al accepts and sells the farm to Betty. Al later realizes that the land was worth more than $160,000. Al can have the contract avoided based upon fraud.

Accepted Answer

A) True 
 B)False

Question 20

Fraud in the inducement will render an agreement void.

Accepted Answer

A) True 
 B)False

Exam 11: Conduct Invalidating Assent

There are two distinct types of fraud.

To obtain relief for negligent or innocent misrepresentation, the elements of fraud must be present but the misrepresentation need not be material.

The remedies of damages and rescission are not available for:

Contracts induced by threats of __________ are voidable, regardless of whether the coerced party has committed an unlawful act.

Adam wants to buy a six-passenger car. The salesman tells him that the two-seat sports car Adam sees on the car lot would be just perfect for six people. Adam test drives the car and then buys it.

Physical compulsion and improper threats are the two basic types of duress.

Anita tells Murray she will hit him in the head with a golf club unless Murray signs a contract agreeing to pay Anita $14,000 for her golf cart, which is only worth $4,000. Because of the threat, Murray signs the contract.

Which of the following would be considered to be a misrepresentation of a material fact for purposes of establishing fraud in the inducement?

Give an example of each of the following: a. Unilateral mistake b. Mistake in the meaning of a contract term.

What elements need to be proved to establish each type of fraud?

Define and discuss the concept of materiality in relation to misrepresentation

If Lucas paid $150 for his vehicle taxes because that is what he was told he owed, then later finds out he only owed $50, he should be able to recover the $100 because this was a unilateral mistake of fact.

Which of the following results in a void contract?

Relationships that may lead to a court's careful scrutinization of contracts between the parties to make sure undue influence was not present include all but:

Generally, whether or not the parties deal at arm's length does not affect whether silence alone amounts to fraud.

An arm's length transaction is one in which the parties owe each other no special duties and each is acting in his or her self-interest.

What are the two types of fraud and what is the effect of each on the contract involved? Give an example of each type of fraud.

Al owns a farm that he believes is worth $150,000. Betty knows that there is oil under the farm and offers Al $160,000 for it. Al accepts and sells the farm to Betty. Al later realizes that the land was worth more than $160,000. Al can have the contract avoided based upon fraud.

Fraud in the inducement will render an agreement void.