Question 1

A material fact is a fact that a reasonable person would consider important when determining his or her course of action

Accepted Answer

T

Question 2

Voluntary consent may be lacking because of misrepresentation but not because of a mistake

Accepted Answer

F

Question 3

A unilateral mistake is a mistake made by both parties to a contract

Accepted Answer

F

Question 4

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

Accepted Answer

F

Question 5

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

Accepted Answer

T

Question 6

Any party who does not receive what he or she considers a fair bargain can argue mistake

Accepted Answer

F

Question 7

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

Accepted Answer

T

Question 8

To recover for fraud, a plaintiff must be twenty-one or more years of age

Accepted Answer

F

Question 9

Courts typically set aside contracts because a party did not volunteer pertinent information

Accepted Answer

F

Question 10

Misrepresentation of a material fact cannot occur through conduct alone

Accepted Answer

F

Question 11

Misrepresentation can occur by words or actions, but not by silence

Accepted Answer

F

Question 12

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

Accepted Answer

T

Question 13

A negligent misrepresentation is not a basis for rescinding a contract

Accepted Answer

F

Question 14

The element of justifiable reliance requires the misrepresentation to be the sole factor in inducing the deceived party to enter into the contract

Accepted Answer

F

Question 15

Because fraud actions necessarily involve wrongful conduct, courts may award punitive damages

Accepted Answer

T

Question 16

An innocent party does not need to suffer an injury to collect damages as a result of a misrepresentation

Accepted Answer

F

Question 17

Duress is a defense to the enforcement of a contract, but not a ground for rescission of a contract

Accepted Answer

F

Question 18

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

Accepted Answer

T

Question 19

In some states, the courts prefer to rely on traditional notions of fraud, undue influence, and duress rather than the concept of unconscionability

Accepted Answer

T

Question 20

Many courts have broadened the concept of unconscionability to apply it in situations other than sales of goods

Accepted Answer

T

Question 21

Refer to Fact Pattern 15-B1. Entrepreneur Enterprises\' best argument in favor of enforcement of the contract is that

Accepted Answer

a unilateral mistake does not afford relief from a contract.

Question 22

Refer to Fact Pattern 15-B1. Digital Storage\'s best defense against enforcement of the contract is that Entrepreneur Enterprises knew

Accepted Answer

the price was below the prices of comparable devices.

Question 23

Refer to Fact Pattern 15-B2. Because of the parties\' belief about the adjacency of the property, their contract is

Accepted Answer

voidable.

Question 24

Refer to Fact Pattern 15-B2. The parties\' belief about the adjacency of the property is

Accepted Answer

a bilateral mistake.

Question 25

Nora enters into a contract with Oceanic Transport, Inc., to insure and ship a painting from France to the United States for a certain price. But Oceanic 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

Accepted Answer

allow the parties to rescind the contract.

Question 26

Garth owns two all-terrain vehicles (ATVs), worth $1,000 and $500, reÂ¬spec-tively. Helen agrees to buy \"Garth\'s ATV\" for $750. Garth believes, in good faith, that he is selling the $500 ATV. Helen believes, in good faith, that she is buying the $1,000 ATV. In this situation

Accepted Answer

there is no contract.

Question 27

At an auction for the first time, Dulcinea bids on a one-hundred-year-old Edison-brand phonograph, believing that it is worth more than the price asked. When the item proves to be less valuable, Dulcinea is

Accepted Answer

liable on the bid.

Question 28

Byron agrees to sell to Charity, for $1,500, a remote parcel of land. They be-lieve the land to be worthless, but beneath it is a gold mine. Byron can

Accepted Answer

not rescind the contract.

Question 29

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

Accepted Answer

fraud.

Question 30

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

Accepted Answer

an opinion.

Question 31

Ray buys a rural vineyard from Sergio, who claims that it would be a prime site for a housing subdivision. Ray later learns that the law does not permit the land to be used for housing. Ray may

Accepted Answer

not rescind the contract.

Question 32

Camille, a tennis pro, convinces Dante, who has no athletic ability, that he has considerable skill and induces him to pay Camille $1,000 for tennis lessons. When Dante realizes the truth, he files a suit against Camille. Dante is most likely to recover on the basis of

Accepted Answer

fraud.

Question 33

Gene sells a trail bike to Hollis without disclosing that the odomeÂ¬ter, which reads 10,000 miles, was disconnected 90,000 miles ago. Gene is most likely liable for

Accepted Answer

fraud.

Question 34

Refer to Fact Pattern 15-B3. Under these circumstances, Colt\'s best course of action is most likely to

Accepted Answer

recover damages or rescind the contract to buy the building.

Question 35

Refer to Fact Pattern 15-B3. On learning the truth, Colt confronts Birdie, who says she was not trying to fool himâshe was only trying to make a sale. This is

Accepted Answer

negligent misrepresentation.

Question 36

Mona is induced by her guardian Newt to sign a contract to invest her student loan funds in Overseas Bank through Newt\'s investment firm. Unknown to Mona, Newt realizes ongoing commissions from the investment. Most likely, Mona may

Accepted Answer

rescind the contract on the basis of undue influence.

Question 37

Drake 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, Drake learns that Eve does not have access to any unique software and files a suit against her, alleging fraud. Proof of an injury is required to

Accepted Answer

recover damages.

Question 38

Seth offers to buy a house from Tia for less than Tia paid for it, stating that he would \"hate to see anything bad happen to Tia or her house.\" Tia agrees to sell. Regarding this agreement, a court would likely

Accepted Answer

not enforce it.

Question 39

ApartmentsRUs, a property management firm, presents a standard-form lease for an apartment to Barnaby, a potential tenant. ApartmentsRUs does not pressure Barnaby to sign the lease, but offers it on a take-it-or-leave-it basis. Barnaby signs the lease, but later wants to withdraw from the contract. He is most likely to avoid enforcement of the lease on the ground of

Accepted Answer

unconscionability.

Question 40

Raven, the owner of Strawberry Fields, contracts to sell its harvest to Tender Fruits, Inc. When Raven refuses to perÂ¬form, Tender Fruits files a suit to enforce the contract. Raven and Tender Fruits are in a state that does not recognize the doctrine of unconscionability. To defend sucÂ¬cessÂ¬fully against enforceÂ¬ment of the contract on similar grounds, Raven might rely on traditional notions of

Accepted Answer

fraud.

Question 41

Every state has a statute that stipulates what types of contracts must be in writing

Accepted Answer

T

Question 42

The writing requirement under the Statute of Frauds means that an agreement must be a formal written contract

Accepted Answer

F

Question 43

Under the Statute of Frauds, all contracts must be in writing to be enforceable

Accepted Answer

F

Question 44

The Statute of Frauds operates as a defense to the enforcement of an oral contract for the sale of land

Accepted Answer

T

Question 45

An agreement that includes an option to purchase real property must be in writing for the option to be enforced

Accepted Answer

T

Question 46

A contract that can, by its own terms, be performed within one year from the day after the contract is formed must be in writing to be enforceable under the Statute of Frauds

Accepted Answer

F

Question 47

A contract that cannot, by its own terms, be performed within one year from the day after the contract is formed does not need to be in writing to be enforceable under the Statute of Frauds

Accepted Answer

F

Question 48

A collateral promise is one made by a third party to assume the debts or obligations of a primary party to a contract if that party does not perform

Accepted Answer

T

Question 49

A primary obligation is a promise to pay another\'s debt only if that party fails to pay

Accepted Answer

F

Question 50

Any collateral promise falls outside the Statute of Frauds and does not need to be in writing to be enforceable

Accepted Answer

F

Question 51

When one creditor guarantees a debtor\'s debt to another creditor to forestall litigation, the guaranty does not need to be in writing to be enforceable

Accepted Answer

T

Question 52

A prenuptial agreement must be in writing to be enforceable under the Statute of Frauds

Accepted Answer

T

Question 53

A contract for a sale of goods priced at $501 must be in writing to be enforceable

Accepted Answer

T

Question 54

Unless a party against whom enforcement of an oral contract is sought admits under oath that a contract for sale was made, the contract will not be enforceable

Accepted Answer

F

Question 55

To be enforceable as a contract, a writing must have been signed by the party who seeks to enforce it

Accepted Answer

F

Question 56

To be enforceable, a memorandum evidencing an oral contract that would otherwise be unenforceable must include all essential and non-essential terms

Accepted Answer

F

Question 57

Oral evidence of otherwise clear terms in a contract can be introduced at a trial to contradict those terms

Accepted Answer

F

Question 58

Oral evidence of the modification of a contract after its making can be introduced at a trial

Accepted Answer

T

Question 59

An integrated contract is the complete and final statement of the terms of the agreement

Accepted Answer

T

Question 60

The Convention on Contracts for the International Sale of Goods incorporates the UCC\'s Statute of Frauds provision

Accepted Answer

F

Question 61

Sonya and Taylor enter into an oral contract that is required to be in writing to be enforceable. Such a contract is normally

Accepted Answer

voidable by a party who does not wish to follow through with it.

Question 62

Sea Harvest Fish Company and Temp Refrigerated Storage Company enter into a long-term lease for a warehouse. To be enforceable, the lease must be in writing

Accepted Answer

if the amount of the rent to be paid is any amount.

Question 63

Guardian Security, Inc., and Hedge Fund Corporation enter into an oral contract under which Guardian Security agrees to provide security services for Hedge Fund offices for as long as Hedge Fund needs them. This contract may be enforceable by

Accepted Answer

either Guardian Security or Hedge Fund.

Question 64

Colette and Dealership Auto Sales Company enter into an oral contract under which Dealership Auto agrees to proÂ¬vide Colette with lifetime employment. This conÂ¬tract may be enforceable by

Accepted Answer

either Colette or Dealership Auto.

BUS315 ch 15+16 – Flashcards

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