Deck 10: Defenses to Contract Enforceability

Question 1

Under the Statute of Frauds, all contracts must be in writing to be enforceable except those involving insignificant transactions.​

Answer 1

False

Question 2

An innocent party can rescind a fraudulent contract and be restored to his or her original position.​

Answer 2

True

Question 3

Normally, a contract will be set aside because certain pertinent information was not volunteered.​

Answer 3

False

Question 4

A contract entered into under undue influence is voidable.​

Question 5

Misrepresentation cannot occur by silence.​

Question 6

A threat to exercise a legal right ordinarily constitutes duress.​

Question 7

Words or terms in contracts that are subject to more than one reasonable interpretation can lead to bilateral mistakes.​

Question 8

When the dominant party in a fiduciary relationship benefits from that relationship, a presumption of undue influence arises.​

Question 9

A price quotation with a mistake in the adding of a number of figures will never render a contract unenforceable.​

Question 10

Courts may award punitive damages in fraud actions.​

Question 11

When a naïve purchaser enters into a contract in reliance on the opinion of an expert, the innocent party is not entitled to rescind the deal.​

Question 12

A seller's attempt to conceal a fact that is material to a contract can give rise to an action for fraud.​

Question 13

Duress is a possible ground for rescission of a contract.​

Question 14

The primary purpose of the Statute of Frauds is to ensure that all parties to a contract understand all of the terms of a contract.​

Question 15

For a party to a contract to receive relief from a mistake, the mistake must involve a material fact.​

Question 16

A contract must be in writing to be enforceable if it makes performance possible only over a period of more than one year.​

Question 17

Any party who does not receive what he or she considers a fair bargain can rescind the deal on the basis of mistake.​

Question 18

A unilateral mistake always gives the mistaken party a right to relief from the contract.​

Question 19

Reliance on a misrepresentation is justified if the misrepresentation is an obviously extravagant statement.​

Question 20

Scienter clearly exists if a party knows a fact is not as stated.​

Question 21

​To be enforceable, a writing evidencing an oral contract must have been signed by the party who seeks to enforce it.

Question 22

An oral contract for a transfer of land is always enforceable.​

Question 23

Dix agrees to sell Eli, for $1,500, a remote parcel of land. They believe the land to be worthless, but beneath it is shale rock containing oil. A court would​

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 undue influence.

Question 24

A prenuptial agreement must be in writing to be enforceable.​

Question 25

To be enforceable, a contract for a sale of goods priced at $500 or more must designate the buyer, seller, terms of payment, and price.​

Question 26

Flora enters into a contract with Global Shipping, Ltd., to insure and ship a painting from France to the United States for a certain price. Global makes a mistake in adding the costs, which results in a contract price that is $1,000 less than the true cost. Most likely, a court would​

A) ​allow the parties to rescind the contract.
B) ​award damages to Flora for the mistake.
C) ​award damages to Global for the mistake.
D) ​enforce the contract as is.

Question 27

Under the Statute of Frauds, land includes physical objects permanently attached to it, such as buildings, fences, trees, and soil.​

Question 28

An integrated contract is a contract with more than one subject or part.​

Question 29

At an auction, Benny bids on a 1957 Chevy coupe, believing that it is worth more than the price asked. When the car proves to need more repairs than Benny estimated, and thus is worth less as is, Benny is​

A) ​still liable on the bid.
B) ​not liable on the bid because he underestimated the cost of repairs.
C) ​not liable on the bid because the auctioneer misrepresented the value.
D) ​not liable on the bid because an auction is not subject to contract law.

Question 30

A written contract for a transfer of land is usually enforceable.​

Question 31

A contract involving interests in property of any kind must be in writing to be enforceable.​

Question 32

Fact Pattern 10-1
County Title Company processes information furnished by others to transfer title to real estate from a seller to a buyer. In performing this task for a sale of land from Doyle to Ezra, the furnished information is mistaken.
​
Refer to Fact Pattern 10-1. The contract between Doyle and Ezra that includes the mistake may be rescinded if the mistake concerns​

A) ​a basic assumption on which the contract was made.
B) ​a term in the contract subject to only one reasonable interpretation.
C) ​a detail on which the parties had a true "meeting of the minds."
D) ​a third party, such as County Title.

Question 33

Fact Pattern 10-1
County Title Company processes information furnished by others to transfer title to real estate from a seller to a buyer. In performing this task for a sale of land from Doyle to Ezra, the furnished information is mistaken.
​
Refer to Fact Pattern 10-1. If Doyle and Ezra are both ignorant of the mistake, it is​

A) ​a bilateral mistake.
B) ​a fraudulent misrepresentation.
C) ​a unilateral mistake.
D) ​unconscionable.

Question 34

An oral contract may be enforceable if the person making the promise could foresee that the promisee would rely on the promise.​

Question 35

A contract in which a party assumes a secondary obligation normally must be in writing to be enforceable.​

Question 36

A party's oral agreement to pay another's debt is never enforceable.​

Question 37

If a party against whom enforcement of an oral contract is sought admits under oath that a contract for sale was made, the contract will be enforceable.​

Question 38

In some states, an otherwise unenforceable oral contract may be enforced under the doctrine of promissory estoppel.​

Question 39

Evidence of prior agreements that differ from the written terms of a contract can be introduced in court to contradict the contract.​

Question 40

To be enforceable, a memorandum evidencing an oral contract must include the essential terms.​

Question 41

Moe threatens physical harm to force Norel to contract to pay him for protecting her store against vandalism and destruction. Norel may​

A) ​rescind the contract or refuse to comply with its terms.
B) ​do nothing once she has agreed to pay.
C) ​recover from her insurer for the cost.
D) ​recover from the local police for their failure to protect her store.

Question 42

In a bike shop, Jessie, who is not knowledgeable about bikes, overhears Kevin say, "This bike could win any race!" Jessie buys the bike, but does not win any races with it. Kevin's statement is​

A) ​a mistake.
B) ​fraudulent.
C) ​an opinion.
D) ​an attempt at undue influence.

Question 43

Fact Pattern 10-3
Grain Co-op, LLC and Hearty Cereals, Inc., discuss the terms of a contract for periodic deliveries of corn. Grain faxes Hearty a memo on Grain's letterhead that summarizes the points on which they agreed, including a two-year term. Grain begins to perform, and Hearty accepts the deliveries but refuses to pay.
Refer to Fact Pattern 10-3. The transaction between Grain and Hearty falls within the provision of the Statute of Frauds involving​

A) ​collateral promises.
B) ​the one-year rule.
C) ​sales of goods.
D) ​secondary contracts.

Question 44

Fact Pattern 10-1
County Title Company processes information furnished by others to transfer title to real estate from a seller to a buyer. In performing this task for a sale of land from Doyle to Ezra, the furnished information is mistaken.
​
Refer to Fact Pattern 10-1. The contract between Doyle and Ezra that includes the mistake may be rescinded if the mistake involves​

A) ​a material fact.
B) ​any fact.
C) ​value or quality.
D) ​any of the choices.

Question 45

Fact Pattern 10-3
Grain Co-op, LLC and Hearty Cereals, Inc., discuss the terms of a contract for periodic deliveries of corn. Grain faxes Hearty a memo on Grain's letterhead that summarizes the points on which they agreed, including a two-year term. Grain begins to perform, and Hearty accepts the deliveries but refuses to pay.
Refer to Fact Pattern 10-3. Between Grain and Hearty, this contract is most likely enforceable against​

A) neither party.​
B) ​Grain only.
C) ​Hearty only.
D) ​Grain and Hearty, at least to the extent of the performance.

Question 46

​Ben makes an appointment for a $50 haircut, buys a bike for $250, and agrees to work for Coding Associates for one year for $5,000 per month, starting at the beginning of next month. To be enforceable, a writing is required for

A) ​the appointment.
B) ​the purchase.
C) ​the employment agreement.
D) ​none of the choices.

Question 47

Alice and Bart enter into a contract for the sale of Canyon Ranch. To be enforceable, this contract must be​

A) ​substantiated by reliable, external evidence.
B) ​signed in a sufficient manner by both parties.
C) ​in writing or evidenced by a written memorandum.
D) ​all of the choices.

Question 48

Fact Pattern 10-2
In selling a commercial building, Riley tells Sam that the property has a certain capacity, making it suitable for a nightclub. Riley knows nothing about the capacity of the building, but it is not as he specifies. Sam buys the building.
​
​Refer to Fact Pattern 10-2. Under these circumstances, Sam's best course of action is most likely to

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

Question 49

Fact Pattern 10-3
Grain Co-op, LLC and Hearty Cereals, Inc., discuss the terms of a contract for periodic deliveries of corn. Grain faxes Hearty a memo on Grain's letterhead that summarizes the points on which they agreed, including a two-year term. Grain begins to perform, and Hearty accepts the deliveries but refuses to pay.
Refer to Fact Pattern 10-3. Between Grain and Hearty, there is​

A) ​an oral contract only.
B) ​a pre-contract only.
C) ​a written contract.
D) ​no contract.

Question 50

Ralph enters into a contract with Skye to buy her land based on her assertion that the land is open to development. After the sale, Ralph learns that only a small section of the land can be built on-a local law prohibits construction on the rest of the property. Ralph can​

A) ​not avoid the contract because persons are assumed to know the law.
B) ​avoid the contract due to a mutual mistake.
C) ​avoid the contract due to a mistake in value.
D) ​avoid the contract due to fraud.

Question 51

Ruth, who is Sal's guardian, convinces him to buy a certain parcel of land from Tyrone at a greatly inflated price. Ruth may be liable for​

A) ​duress.
B) ​fraud.
C) ​mistake.
D) ​undue influence.

Question 52

Car Lot's salesperson Dick offers to sell Ernie, who is twenty years old, a car. Dick intentionally misrepresents the vehicle's use and repairs. In reliance, Ernie buys the car. To prove fraud, Ernie does not have to show that​

A) ​Dick intentionally deceived Ernie.
B) ​Dick misrepresented material facts.
C) ​Ernie is under twenty-one.
D) ​Ernie justifiably relied on Dick's misrepresentations.

Question 53

Don enters into a contract with Eve, who claims to have access to a stock-trading algorithm that will multiply an investment many times over. When the results do not match this promise, Don learns that Eve does not have access to any unique software and files a suit, alleging fraud. Proof of an injury is required to​

A) ​recover damages.
B) ​rescind the contract.
C) ​undo Eve's influence.
D) ​punish the defendant.

Question 54

Dim threatens physical harm to force Ed to sell his business, Flowers, Inc., to Dim for a below-market price. This is​

A) ​duress.
B) ​fraud.
C) ​mistake.
D) ​undue influence.

Question 55

In an exchange of e-mails, Rob, a landlord, and Sam agree to a lease of a certain apartment for one year. Under the Statute of Frauds, this lease is enforceable provided​

A) ​the e-mail is signed by the party against whom enforcement is sought.
B) ​the parties print and sign a hard copy of a document titled "Lease."
C) ​there is outside evidence, such as a security deposit, of the lease.
D) ​no one else signs a lease for the apartment before Sam moves in.

Question 56

Ken, a real estate agent, assures Lily that a certain parcel of commercial property fronts on the most highly trafficked street in Metro City. Lily buys the property and then discovers that the street has no more traffic than any other in its vicinity. Lily is most likely a victim of​

A) ​opinion.
B) ​fraud.
C) ​mistake.
D) ​an adhesion contract.

Question 57

Mona is induced by her guardian Newt to sign a contract to invest her student loan funds in OptiBank through Newt's investment firm. Unknown to Mona, Newt realizes a commission from the investment. Most likely, Mona may rescind the contract on the basis of​

A) ​duress.
B) ​fraud.
C) ​mistake.
D) ​undue influence.

Question 58

Fact Pattern 10-2
In selling a commercial building, Riley tells Sam that the property has a certain capacity, making it suitable for a nightclub. Riley knows nothing about the capacity of the building, but it is not as he specifies. Sam buys the building.
​
Refer to Fact Pattern 10-2. On learning the truth, Sam confronts Riley, who says he was not trying to fool Sam-he was only trying to make a sale. This is​

A) ​a mistake of value.
B) ​a valid defense to a charge of fraud.
C) ​misrepresentation.
D) ​unconscionable.

Question 59

Colin and Delta Water Company enter into an oral contract under which Delta agrees to provide Colin with lifetime employment. This contract may be enforceable by​

A) ​Colin only.
B) ​Delta only.
C) ​any interested third party, such as a Delta supplier.
D) ​either Colin or Delta.

Question 60

Ray agrees to buy one hundred pounds of almonds from Sol. To be enforceable, the agreement must be in writing if the almonds cost at least​

A) ​$50.
B) ​$250.
C) ​$499.
D) ​$500.

Question 61

Pumps, Inc., agrees to assume a debt of Quality Parts Company to Reliable Finance LP. The agreement is not in writing. To be enforceable, the promise must be for the benefit of​

A) ​all of the choices.
B) ​Pumps.
C) ​Quality.
D) ​Reliable.

Question 62

Physicians Clinic orders by phone seven boxes of single-use latex gloves from Quality Medical Supplies, Inc. After three boxes are delivered and accepted, Physicians Clinic repudiates the contract. Quality Medical can enforce the contract to​

A) ​any extent because the order was placed orally.
B) ​no extent because the order was placed orally.
C) ​the extent of the three accepted boxes.
D) ​the extent of the four undelivered boxes.

Question 63

Hal's Hardware Inc. and Ideal Tools Corporation sign a written contract for a sale of goods. To be enforceable, this written contract must include​

A) ​a correct title, such as "Purchase Order" or "Sales Invoice."
B) ​a date, such as "October 2017" or "10/2017."
C) ​a quantity term, such as "50 hammers" or "100 boxes of assorted nails."
D) ​the parties' contact information.

Question 64

​Fact Pattern 10-4
Alain and Brie sign a contract for the sale of Alain's Patisserie to Brie. The parties intend their written contract to be a final statement of most, but not all, of the terms of their agreement-Alain must first buy the building from Commercial Properties, Inc., after which Alain and Brie will agree on a price.
Refer to Fact Pattern 10-4. Brie later disputes some of the provisions of the deal with Alain. If the dispute results in litigation, a court will most likely admit evidence of additional terms that are​

A) ​ambiguous.
B) ​consistent.
C) ​contradictory.
D) ​clear.

Question 65

Ed orally agrees with Far East Restaurant to provide delivery service to its customers for six months. This contract is enforceable by​

A) ​none of the choices.
B) ​either Ed or Far East.
C) ​any interested third party, such as a Far East customer.
D) ​Far East only.

Question 66

Henry files a suit against Irrigation Services to enforce an oral contract that would otherwise be unenforceable under the Statute of Frauds. The court could enforce such a contract if​

A) ​Henry foreseeably and justifiably relied on Irrigation's promise.
B) ​Irrigation denies the existence of a contract.
C) ​neither party has begun to perform.
D) ​the deal does not involve goods.

Question 67

​Fact Pattern 10-4
Alain and Brie sign a contract for the sale of Alain's Patisserie to Brie. The parties intend their written contract to be a final statement of most, but not all, of the terms of their agreement-Alain must first buy the building from Commercial Properties, Inc., after which Alain and Brie will agree on a price.
Refer to Fact Pattern 10-4. The writing that Alain and Brie signed is​

A) ​completely integrated.
B) ​conditionally integrated.
C) ​partially integrated.
D) ​supplementally integrated.

Question 68

In a transaction for the sale of an auto painting facility, Bright Auto Colors Company tells Custom Cars Corporation that the paints and other supplies on-site are included. The contract says nothing about the supplies on-site, but does state, "This document supersedes all oral promises relating to the sale." Are the supplies part of the sale? Why or why not?​

Question 69

Waterfront Hotel Inc. in Boston offers a job to Carol, who lives in Denver. Carol orally agrees to work for Waterfront for two years. She moves her family to Boston and begins work. Three months later, she is fired for no stated cause. She files a suit against the employer for reinstatement or pay. Waterfront pleads the lack of a written contract. In whose favor is the court likely to rule, and why?​

Question 70

Maya and Nick enter into a contract. To be enforceable, the contract must include​

A) ​no particular signatures.
B) ​the signatures of both Maya and Nick.
C) ​the signature of the party against whom enforcement is sought.
D) ​the signature of the party who is seeking enforcement.

Question 71

Ranchland Properties and Prairie State Investments sign a written contract for a sale of land. In some states, to be enforceable, this contract must include​

A) ​a correct title, such as "Land Transfer" or "Real Estate Agreement."
B) ​a declaration of the contract's purpose.
C) ​a statement of the source of financing.
D) ​a description of the land.

Question 72

Marketing, Inc., and Nature's Foods Corporation (NFC) discuss a contract. They exchange "signed" e-mails that summarize the terms on which they agree. Marketing begins to perform, but Nature's refuses to pay. Between Marketing and Nature's, the e-mails are​

A) ​a post-contract.
B) ​a pre-contract.
C) ​a written contract.
D) ​no contract.