Deck 9: Enforceability

Question 1

Once a valid contract is formed, courts will enforce that contract no matter what.

Answer 1

False

Question 2

Genuine assent may be lacking because of misrepresentation, fraud, duress, undue influence, or unconscionability.

Answer 2

True

Question 3

Al, noticing a sign in the window of a restaurant which reads "World's Greatest Coffee!", excitedly runs into the place and agrees to buy $100.00 worth of their coffee. Al can get out of that contract because it was a misrepresentation.

Answer 3

False

Question 4

Fraud can occur when a person takes steps to conceal a material fact.

Question 5

Ralph threatens to fire Shirley if she reports incidents of sexual harassment she has faced on the job from a co-worker. She agrees to not report so long as Ralph does not fire her. Shirley could avoid this contract on the basis of duress.

Question 6

Courts routinely render a contract unenforceable due to unconscionability.

Question 7

Unconscionability allows a court to render a contract unenforceable if the consideration is grossly unequal, such that it shocks the conscience.

Question 8

A verbal contract for the sale of real estate is enforceable under the statute of frauds as long as the parties agree to it.

Question 9

The parol evidence rule states that any oral agreements made that contradict the intended final writing of the agreement are not enforceable.

Question 10

Consent defects include all of the following except

A) Misrepresentation
B) Fraud
C) Unconscionability
D) Unwiseness

Question 11

Without genuiness of assent

A) A promise made is not legally binding.
B) The contract lack legality of purpose.
C) The parties to the contract are bound to the terms only if the court determines it is fair.
D) The parties must renegotiate the terms of the contract.

Question 12

When one person has more or better information than the other is an example of

A) Unequal bargaining power
B) Unjust enrichment
C) Information asymmetry
D) Procedural defect

Question 13

Maddie cannot read. She signs a cell phone agreement without being able to read the document. This is an example of

A) Unequal bargaining power
B) Unjust enrichment
C) Substantive defect
D) Information asymmetry

Question 14

Cliff sells a calculator to Lydia. He states he has only used it for his geometry class which was a lie because he never took geometry. He used it in his basic math class. Since Cliff lied to Lydia, most likely would Lydia be successful in asserting the defense of misrepresentation to get out of the contract?

A) Yes if Cliff lied about any fact during the negotiation process.
B) No, unless the court determines his lie about the class in which he used the calculator was a lie about a material fact.
C) Yes if he intentionally lied.
D) No as most likely the court will rule his lie was unintentional.

Question 15

A fact is material if

A) It concerns a basic assumption in the agreement that could change the value of the contract.
B) The reasonable person would find it misleading during the negotiation process of the contract.
C) It is any fact stated in contract negotiations that either party made.
D) The fact is objectively verifiable as true or false.

Question 16

In order for a party to avoid a contract based upon the defense of misrepresentation, all of the following must be present, except

A) It must be a misrepresentation about a material fact.
B) The person must have justifiably relied upon that fact.
C) It must be a misrepresentation about a fact.
D) It must be a lie about an opinion.

Question 17

Josh sells t-shirts at an amusement park. When selling t-shirts, he often tells people that the shirts are the softest shirts ever created. If he did not truly believe that and it was a lie, would this be an example of misrepresentation?

A) No because it is a lie about an opinion.
B) Yes because it is a lie about an opinion.
C) No because it is not an important opinion.
D) Yes because he lied.

Question 18

Custom Candy Creations, a candy shop, has on its sign "The Finest Candy in the World." This is an example of

A) Fraud
B) Misrepresentation
C) Puffing
D) Misleading

Question 19

In the case of Vokes v. Arthur Murray Dance Studio, the court determined that the dance instructor's intentional lie to an elderly widow, claiming that she had excellent dance potential, was

A) An opinion and not misrepresentation.
B) A fact because the dance instructor had superior knowledge.
C) An opinion that she unreasonably relied upon.
D) A statement of opinion because it was not quantifiable.

Question 20

Fraud requires

A) The appearance of a lie
B) Reasonable likelihood of a lie
C) Actual knowledge of a lie
D) Evil motive of a lie

Question 21

Parker runs Auto Oil Change. His arch enemy Stella comes into his business to get her oil changed. Parker intentionally lies when he tells Stella that he refilled her oil, when he actually left it empty. As a result, when Stella drives away her engine block freezes up and destroys her engine. Accordingly, which statement below is true about which damages she may recover because of Parker's fraudulent actions?

A) None, since there was no genuine assent no contract exists and therefore she cannot recover any damages.
B) Consequential damages because intentional lies allow an injured party to request them.
C) Only out of pocket costs for the lost oil.
D) Pain and suffering as the courts want to discourage this unethical conduct and the emotional stress it would cause.

Question 22

If a person unintentionally engages in innocent misrepresentation, the other party may

A) Sue for trebble damages
B) Recover consequential damages
C) Avoid the contract
D) Sue for punitive damages

Question 23

Innocent misrepresentation includes all of the following except

A) The person making the representation believes it to be true
B) There is no intention to deceive
C) The aggrieved party can avoid the contract
D) The aggrieved party can recover punitive damages

Question 24

Tye is selling his house which sustained a lot of water damage due to a leaky roof. Water damage stains grace the living room walls. Right before he shows his house, he paints over the water stains. Which statement below is correct?

A) This is not misrepresentation since he never actually said something that was a lie.
B) This is an example of misrepresentation because he took affirmative actions to conceal the truth.
C) This is not misrepresentation unless the party buys the house believing that there is no water damage.
D) This is an example of misrepresentation because it would result in an unjust enrichment.

Question 25

Meghan has some very embarrassing pictures of Kalieh. Meghan tells Kalieh that she will post the pictures all over various social media accounts unless Kalieh agrees to sell Meghan an antique wedding ring for $500.00. Out of fear that Meghan will indeed publish the pictures, Kalieh agrees to sell the ring for $500.00. Kalieh will be able to claim the defense of

A) Duress
B) Undue influence
C) Fraud
D) Mistake

Question 26

Your boss threatens to fire you if you do not buy 10 boxes of his daughter's Girl Scout Cookies. You begrudgingly buy the 10 boxes of thin mints for fear that you will lose your job. Would this be an example of duress?

A) No because everyone loves thin mints and therefore the reasonable person would not feel a detriment.
B) No because the reasonable person, objectively, would not truly feel pressured into the contract.
C) Yes but only if you can prove that you do not like thin mints.
D) Yes because duress is determined by what the person put under pressure feels, not the reasonable person.

Question 27

Drake visited Dr. Young because his left foot was bothering him. After an examination, the doctor knew that the most common, most successful treatment would be rest, ice and an anti-inflammatory. However, Dr. Young knows that if he prescribes special vitamins he will profit from a special incentive program through a pharmaceutical company. Therefore, Dr. Young suggests that Drake also sign up for the vitamin regimen as well. While the vitamins will not hurt Drake, they also will not help his foot at all. Trusting Dr. Young, Drake signs up for the full vitamin regimen. Which would be the best defense to claim in this instance?

A) Fraud
B) Misrepresentation
C) Duress
D) Undue influence

Question 28

When a contract is entered into that is so grossly unfair that it shocks the conscience it is called

A) Fraudulent
B) Undue Influence
C) Unconscionable
D) Deceptive

Question 29

Standardized, preprinted contracts are called

A) Adhesion contracts
B) Option contracts
C) Unconscionable contracts
D) Exclusive contracts

Question 30

In general, when dealing with an adhesion contract, courts will

A) Assume they are illegal
B) Assume they are unconscionable
C) Assume that the non-drafter had no real opportunity to bargain for the terms
D) Assume that the contract is unfair

Question 31

A Verizon cell phone contract is an example of

A) A statutory contract
B) An adhesion contract
C) An equitable contract
D) A service contract

Question 32

The main purpose of the statute of frauds is to

A) Ensure that both parties have equal bargaining power.
B) Create an equal exchange of information so that both parties can make an informed decision.
C) Prevent fraud by requiring a written contract to have written evidence of the agreement.
D) Encourage parties to operate ethically and morally.

Question 33

Which of the following is not an example of when a contract must be in writing according to the statute of frauds?

A) Sadie sells Shirley five acres of land
B) Reid agrees to cosign on Gabrielle's student loan
C) Jeff agrees to mow Julie's lawn for $100.00
D) Jessica sells her car to Tina for $5000.00

Question 34

Under the statute of frauds, the one year rule states

A) Contracts that cannot be completed within a year must also be notarized
B) Contracts that may take over a year to complete must be in writing
C) Contracts that may take under a year to complete must be in writing
D) Contracts that by their very terms cannot possibly be completed within a year must be in writing

Question 35

Which of the following examples falls under the one-year rule of the statute of frauds?

A) Dennis hires Att Construction to build his 15 bedroom house
B) Danyelle hires Bequette Cabinetry to make five complete sets of kitchen cabinets
C) Shana hires Robert to do her homework for three years
D) Eunice hires Herb to fix her roof

Question 36

Travis and Brooke offer to buy a house from Michael and Tara because they love the location, the size, and the decorations. Michael and Tara accept the offer and reduce it to a writing that states Travis and Brooke will pay $100,000.00 to Michael and Tara for their house at 123 East 4th Street, Tulsa, OK. When Travis and Brooke move into the house, they are furious because Michael and Tara took all of their furniture and decorations with them, and Travis and Brooke loved the house so much primarily because of the furniture and decorations. Travis said they talked about this a lot with Michael and Tara during the sale. Which statement below is correct according to the parol evidence rule?

A) Michael and Tara will be required to return their furniture and decorations because they talked about it with Travis and Tara in the sale of the house.
B) Since the writing only referred to the sale of the house and not the contents, the sale only includes the house.
C) Since there is a dispute as to the terms, the court will listen to evidence at trial to interpret the terms of the written contract.
D) The court will throw out the contract and will require them to renegotiate a new contract.

Question 37

Copeland Breeders sells a Redbone Coonhound puppy to the Hightower family. In anticipation for the day that the family gets to pick up the puppy they purchased, the breeder sent pictures via text of, "your pup!" The pictures show the same puppy in each one of a completely red haired pup with a solid black nose. When the Hightower family shows up to pick up their purchased pup, they all immediately notice the dog that the Breeder is giving them is not the same as the puppy in the many pictures because this puppy has a solid red nose and a white tail. When they ask for their puppy, the breeder said he never guaranteed a specific puppy and that the puppy in the pictures was already given to another family. The breeder states that the writing only states that he would sell them one puppy for $500.00. Will the court allow the use of the pictures and texts in contract interpretation?

A) Yes, since the term is ambiguous and in dispute, the court will allow the texts and pictures.
B) No, a puppy is a puppy and the court will rule any outside information will not be allowed.
C) No, as long as the breeder is able to provide a puppy of the same age, there has been substantial performance of the contract and will not seek to disrupt the written word.
D) Yes, as long as the court determines that the breeder operated in good faith.

Question 38

The statute governing which contracts must be in writing to be enforceable is

A) The statue of terms
B) The statute of frauds
C) The statute of contracts
D) The statue of writings

Question 39

The interpretation rule stating that any writing by the partiesintended to be the final expression of their agreement may not be contradicted by any oral or written agreements made prior to the writing is called the

A) Statute of frauds
B) Statute of finiteness
C) Parol evidence rule
D) Plain-meaning rule

Question 40

If a term in a contract is ambiguous and unclear, when interpreting the term the court will generally construe the terms

A) In favor of the contract drafter
B) Against the drafter
C) In a manner the court feels is fair and just
D) According to the rules set forth in the UCC

Question 41

The knowing and voluntary and mutual approval of the terms of the contract by each party required for a contract to be enforceable is

A) Genuine assent
B) Consideration
C) Capacity
D) Legality

Question 42

Fraudulent misrepresentation requires

A) Reckless disregard for the truth
B) Negligent disregard for the truth
C) Scienter
D) Maliciousness and repugnant intent

Question 43

What type of damages are often allowed in fraud cases?

A) Equitable damages
B) Injunctive damages
C) Treble damages
D) Double damages

Question 44

Shawn is selling her house. During an open house, she enters into a conversation with a prospective buyer, Ned, who keeps stating that he cannot believe that Shawn is selling this house with absolutely no termite damage for the price she is asking. Shawn has actual knowledge that the house is infested with termites but does not correct Ned at any time. Is this a lie?

A) No because Shawn never made a statement
B) No because she never made affirmative conduct
C) Yes because Shawn failed to correct a past statement that she knew was false
D) Yes because all people have a duty to disclose all facts of a transaction

Question 45

In the business environment, explain why consent defects may affect the enforceability of a contract?

Question 46

Explain and differentiate fraud and innocent misrepresentation and the possible effects of each on the contract and the innocent parties' remedies.

Question 47

Explain why the court, in Vokes v. Arthur Murray Dance Studio, ruled that a dance instructor's statements that would normally be seen as an opinion were, in reality, statements of fact.

Question 48

Sheldon enters into an employment contract with Caltech Laboratory wherein he agrees to work for them until he solves the scientific equation of string theory. He has already been researching a solution to the theory for over a decade with no substantial movement toward a solution. Does this employment contract have to be in writing according to the statute of frauds? Explain your reasoning why.

Question 49

Explain why most courts employ the parol evidence rule in contract interpretation.