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Which of the following refers to special relationships in which one person has taken advantage of his or her dominant position in a relationship to unduly persuade the other person?


A) Duress
B) Master manipulation
C) Undue influence
D) Special relationship
E) Dominating influence

F) C) and E)
G) A) and C)

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For fraudulent misrepresentation to be the basis for a contract rescission, the statement of fact must in writing.

A) True
B) False

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In determining whether a mistake of fact occurred, which of the following is true?


A) Courts look to determine whether a mistake of fact occurred at the time the contract was concluded.
B) Courts look to determine whether a mistake of fact occurred during contract negotiations.
C) Courts look to determine whether a mistake of fact occurred when the initial offer was made.
D) Courts look to determine whether a mistake of fact occurred when an advertisement was made.
E) Courts look to determine whether a mistake of fact occurred after the contract was concluded.

F) A) and B)
G) D) and E)

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Marissa was interested in buying a used personal watercraft from Victor. He told her that the engine on the watercraft was in good shape. Marissa agreed to pay Victor $4,000 for the watercraft. Marissa was going out of town on vacation, so they agreed that when she returned in a week, she would pay Victor and pick up the watercraft. During that week, the manufacturer notified Victor that the watercraft was being recalled because it had a faulty engine. Victor said nothing about the condition of the engine or the recall when Marissa came to pick up the watercraft. They chatted about other matters; she gave him the $4,000, and took the watercraft. Later, Marissa started having problems with the watercraft and found out that Victor and other initial purchasers had been notified of the issue with the engine. She asked for a refund, accusing Victor of fraud. Victor refused on the basis that he did not make any misrepresentation. Who is correct and why? For purposes of this question, assume that sales talk or puffery is not at issue.

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Marissa is correct. Courts will find non...

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A[n] ________ misrepresentation results from a false statement about a fact material to an agreement that the person making the statement believed to be true.


A) unilateral
B) purposeful
C) innocent
D) wrongful
E) illegal

F) A) and E)
G) B) and E)

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Angela is Piper's business law professor. Angela wants to enter into a contract with Piper for Piper to serve as her personal assistant. To avoid any potential claim of undue influence, what would be the best advice for Angela?


A) Make sure Piper is qualified for the job.
B) Do a background check on Piper.
C) Make sure that Piper has independent advice before entering into the contract.
D) Make sure Piper is paid fairly.
E) Make sure the contract does not contain any mistakes.

F) All of the above
G) A) and B)

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[Scheming 'Friends'] Richard wants to rent a basement apartment in Eric's home. Richard threatens to tell Eric's parents that Eric had been arrested for illegally smoking marijuana unless Eric rents the apartment to him for $100 per month. (The information regarding the arrest is true.) Eric reluctantly agrees to rent the apartment to Richard for $100 per month. Richard also wants to buy Eric's car. Eric runs back the odometer on the car before Richard looks at it. Richard is impressed by the low mileage and agrees to buy the car. Eric offers to sell Richard a ring for Richard's fiancée. Eric tells Richard that the ring is a diamond and believes that to be true. After the deal is made, however, a jeweler friend of Eric informs him that the ring is a fake. When Richard shows up with the money, Eric says nothing. He just hands Richard the ring and takes the money. Later, Richard finds out that the odometer was run backwards from another friend in whom Eric confided. Richard also finds out from his girlfriend that the ring is a fake. -Which statement is true regarding Richard's rights in regards to the ring purchase?


A) He will not be able to rescind the contract because Eric did not make an express false statement regarding the ring.
B) He will not be able to rescind the contract because Eric did not know the ring was a fake when the initial agreement was made.
C) He will not be able to rescind the contract unless he can prove that Eric was at least negligent in not realizing the ring was a fake when the initial agreement was made.
D) He will be able to rescind the agreement because Eric was guilty of duress.
E) He will be able to rescind the agreement because Eric was guilty of fraudulent misrepresentation.

F) All of the above
G) A) and C)

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Gordon, Melinda's long-time attorney, uses his position as her attorney to persuade her to sign over her property to Gordon's best friend Bartholomew. This is undue influence.

A) True
B) False

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It is not necessary to show reliance to prove fraudulent misrepresentation.

A) True
B) False

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In China, which of the following is true regarding the treatment of fraudulent misrepresentations by outsiders?


A) Outsiders have been fined but by law are allowed to continue operating in the country because of the country's concern with joint ventures.
B) Outsiders have been prohibited from doing further business with Chinese firms but not fined because of the country's concern with its reputation with foreign investors.
C) Outsiders are jailed for at least 20 years by law.
D) Outsiders are jailed for at least 10 years, fined heavily, and have all property confiscated.
E) Outsiders have been fined heavily and refused permission to enter into more agreements with Chinese firms.

F) A) and E)
G) C) and D)

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