Question 1

Travis had too many beers at the baseball game.Ed realized Travis was so intoxicated he wouldn't know what he was doing,so he got Travis to sign a promise to sell his motorcycle to Ed for $50.When Travis gets sober,he can attempt to void the contract.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is NOT a true statement about fraud?

Accepted Answer

A) The plaintiff must prove that the defendant has knowledge of the falsity of his or her statement. 
B) It is necessary for the plaintiff to show that he or she has suffered some type of detriment or injury because of his or her reasonable reliance on the defendant's false statement. 
C) The defendant made the statement with the intent to induce the plaintiff to enter into the contract. 
D) The plaintiff must show that although the defendant acted in good faith,the statement was material because the defendant expected the plaintiff to rely on it and enter into the contract.

Question 3

Jeff was a subcontractor,bidding on a contract for ACE Corp. ,the general contractor.When adding up the total of materials and labor,Jeff's secretary mistakenly moved the decimal point one place,ending up with a bid of $3,500 rather than $35,000.ACE Corp.accepted Jeff's bid,mostly because all the other bids were over $30,000.When Jeff learns of the mistake,he tells ACE Corp.that he cannot do the job for $3,500.If ACE Corp.sues to enforce this contract,what is the most likely result?

Accepted Answer

A) The contract is enforceable,since there was an offer,acceptance,and consideration. 
B) This is a bilateral mistake,so the contract can be rescinded by either party. 
C) This is a unilateral mistake,so the contract cannot be rescinded by Jeff. 
D) This is a unilateral mistake,but one where ACE Corp.knew that a mistake had been made.Jeff should be able to rescind the contract.

Question 4

Marty,a 16-year-old,contracted with Cream-of-the-Crop Cycles to buy an $8,000 motorcycle.He agreed to make monthly payments until the purchase price plus interest were paid in full.It is three years later and Marty has not disaffirmed the contract and has made regular payments on the cycle since turning 18.Which of the following is correct?

Accepted Answer

A) The contract is void and Marty has no obligation. 
B) The contract is now voidable by Cream-of-the-Crop Cycles. 
C) Marty has ratified the contract and is now bound by its terms. 
D) Marty has ratified the contract but can still get a return of the payments made while he was a minor.

Question 5

If a minor can cancel a contract,it can be done at any time before the minor reaches the age of majority or within a reasonable time after reaching majority age.

Accepted Answer

A) True 
 B)False

Question 6

Ron,a minor,goes to the hospital for treatment of the flu.On the new-patient form Ron signs,he agrees to pay for any care or treatment he receives.When billed for the treatment,

Accepted Answer

A) Ron must pay for the value of the benefit he received,because medical care is a necessary. 
B) Ron must pay for the benefit he received because the contract is fully executory. 
C) Ron must pay for the benefit he received because he ratified the contract. 
D) Ron does not have to pay for the benefit he received.

Question 7

Which scenario is an example of puffery?

Accepted Answer

A) Martina purchases a ring from Alison.Both genuinely believe the stone in the ring is an emerald,but Martina later finds out the stone is just cut glass. 
B) A salesperson tells Jinxing that the shiny,chrome-covered motorcycle he is looking at is "the hottest ride on the road." 
C) Simon threatens to smash the windshield out of Clara's vintage Pontiac GTO unless she agrees to sell it to him. 
D) The clerk at the candy store tells Billy the "Jug 'o Jellybeans" contains 1,000 jellybeans.When Billy takes the jug home and counts,he finds that the jug contains only 995 jellybeans.

Question 8

Alejandro was new in town and was considering buying Helen's house.The paint was peeling off the exterior and most of the windows were broken,but Helen did not make a point of mentioning these defects.Alejandro bought the house,but the following month he attempted to rescind the contract because Helen had not explicitly pointed out these cosmetic problems.What will the likely outcome be?

Accepted Answer

A) Alejandro will definitely be successful because Helen had a duty to report any defects about the house. 
B) Alejandro will probably be successful because there was a relationship of trust between himself and Helen. 
C) Alejandro will definitely succeed because he bought the house under duress. 
D) Alejandro will probably not be successful;this is something he could have reasonably been expected to notice himself.

Question 9

Mrs.Elsley was an elderly woman who relied on Nancy to visit her every day and prepare her meals.Nancy convinced Mrs.Elsley that she should give Nancy her house so they could live together and Nancy could better care for her,although Nancy really just wanted the house and had no intention of moving in to take care of Mrs.Elsley.Although Mrs.Elsley agreed,she may rescind the contract because of undue influence.

Accepted Answer

A) True 
 B)False

Question 10

An example of the type of relationship required to find undue influence would be

Accepted Answer

A) a salesperson-purchaser relationship. 
B) a bartender-customer relationship. 
C) a doctor-patient relationship. 
D) a neighbor-neighbor relationship.

Question 11

Frank suffers from a mental impairment due to a brain injury from a airplane accident.He contracts with Glena to purchase her dining room furniture.A month later,he tries to void the contract.If he is unable to return the furniture,a court will not rescind the agreement unless Frank can show that Glena acted in bad faith.

Accepted Answer

A) True 
 B)False

Question 12

A(n)_______ contract is illegal from the beginning and may not be enforced by either party;a(n)_______ contract is legal but permits one party to escape,if he or she so wishes.

Accepted Answer

A) disaffirmed;affirmed 
B) void;voidable 
C) affirmed;disaffirmed 
D) voidable;void

Question 13

Reed,a 15-year-old,has run out of money while on a trip away from home.Martha gives him food,a place to sleep,and his bus fare home,in exchange for Reed's promise to pay $200 after he got home.Is Reed's promise enforceable?

Accepted Answer

The answer of Reed,a 15-year-old,has run out of money while...

Question 14

Marty,a 16-year-old,contracts with Cream-of-the-Crop Cycles to buy an $8,000 motorcycle.Marty agrees to make monthly payments until the purchase price plus interest is paid in full.Which of the following is correct?

Accepted Answer

A) The contract is voidable by Marty. 
B) The contract is void as soon as it is made. 
C) The contract is voidable by Cream-of-the-Crop Cycles. 
D) The contract is voidable by either Marty or Cream-of-the-Crop Cycles.

Question 15

When fraud is committed during the sale of goods,all states allow the remedy of rescinding a contract while still allowing the remedy of suing for damages.

Accepted Answer

A) True 
 B)False

Question 16

Larson entered Forrester's Auto Mart to purchase a used car.Larson found a vehicle with a sales price of $11,000.After Forrester answered all of Larson's questions,Forrester and Larson agreed to a sale.As Larson was leaving to get the money to pay for the car,Forrester told Larson that he thought Robert Redford formerly owned the car.Larson later learned that Robert Redford had never owned the car.If Larson seeks to rescind the deal based on Forrester's statement,Larson will

Accepted Answer

A) win because he relied on the misrepresentation. 
B) win because there was a misrepresentation of a material fact. 
C) lose because he will not be able to prove reliance on the misrepresentation. 
D) lose because Forrester made a unilateral mistake.

Question 17

What is the difference between a unilateral mistake and a mutual mistake? Under what circumstances will a court refuse to rescind a contract based on the defense of a "mistake"?

Accepted Answer

The answer of What is the difference between a unilateral...

Question 18

A person who is mentally impaired generally can create only __________ contracts.

Accepted Answer

A) fraudulent 
B) void 
C) unconscionable 
D) voidable

Question 19

When courts consider economic duress,they consider all the following factors EXCEPT

Accepted Answer

A) relative bargaining power. 
B) financial distress. 
C) legitimate business purpose. 
D) relative size of the contract.

Question 20

Spencer,age 18 and of sound mind,has the legal capacity to contract.

Accepted Answer

A) True 
 B)False

Exam 15: Voidable Contracts: Capacity and Consent

Travis had too many beers at the baseball game.Ed realized Travis was so intoxicated he wouldn't know what he was doing,so he got Travis to sign a promise to sell his motorcycle to Ed for $50.When Travis gets sober,he can attempt to void the contract.

Which of the following is NOT a true statement about fraud?

If a minor can cancel a contract,it can be done at any time before the minor reaches the age of majority or within a reasonable time after reaching majority age.

Ron,a minor,goes to the hospital for treatment of the flu.On the new-patient form Ron signs,he agrees to pay for any care or treatment he receives.When billed for the treatment,

Which scenario is an example of puffery?

An example of the type of relationship required to find undue influence would be

A(n) _ contract is illegal from the beginning and may not be enforced by either party;a(n) _ contract is legal but permits one party to escape,if he or she so wishes.

Reed,a 15-year-old,has run out of money while on a trip away from home.Martha gives him food,a place to sleep,and his bus fare home,in exchange for Reed's promise to pay $200 after he got home.Is Reed's promise enforceable?

Marty,a 16-year-old,contracts with Cream-of-the-Crop Cycles to buy an $8,000 motorcycle.Marty agrees to make monthly payments until the purchase price plus interest is paid in full.Which of the following is correct?

When fraud is committed during the sale of goods,all states allow the remedy of rescinding a contract while still allowing the remedy of suing for damages.

What is the difference between a unilateral mistake and a mutual mistake? Under what circumstances will a court refuse to rescind a contract based on the defense of a "mistake"?

A person who is mentally impaired generally can create only __________ contracts.

When courts consider economic duress,they consider all the following factors EXCEPT

Spencer,age 18 and of sound mind,has the legal capacity to contract.

Exam 15: Voidable Contracts: Capacity and Consent

Travis had too many beers at the baseball game.Ed realized Travis was so intoxicated he wouldn't know what he was doing,so he got Travis to sign a promise to sell his motorcycle to Ed for $50.When Travis gets sober,he can attempt to void the contract.

Which of the following is NOT a true statement about fraud?

If a minor can cancel a contract,it can be done at any time before the minor reaches the age of majority or within a reasonable time after reaching majority age.

Ron,a minor,goes to the hospital for treatment of the flu.On the new-patient form Ron signs,he agrees to pay for any care or treatment he receives.When billed for the treatment,

Which scenario is an example of puffery?

An example of the type of relationship required to find undue influence would be

A(n) _______ contract is illegal from the beginning and may not be enforced by either party;a(n) _______ contract is legal but permits one party to escape,if he or she so wishes.

Reed,a 15-year-old,has run out of money while on a trip away from home.Martha gives him food,a place to sleep,and his bus fare home,in exchange for Reed's promise to pay $200 after he got home.Is Reed's promise enforceable?

Marty,a 16-year-old,contracts with Cream-of-the-Crop Cycles to buy an $8,000 motorcycle.Marty agrees to make monthly payments until the purchase price plus interest is paid in full.Which of the following is correct?

When fraud is committed during the sale of goods,all states allow the remedy of rescinding a contract while still allowing the remedy of suing for damages.

What is the difference between a unilateral mistake and a mutual mistake? Under what circumstances will a court refuse to rescind a contract based on the defense of a "mistake"?

A person who is mentally impaired generally can create only __________ contracts.

When courts consider economic duress,they consider all the following factors EXCEPT

Spencer,age 18 and of sound mind,has the legal capacity to contract.

A(n) _ contract is illegal from the beginning and may not be enforced by either party;a(n) _ contract is legal but permits one party to escape,if he or she so wishes.