Question 1

Which of the following is true regarding European courts?

Accepted Answer

A)   European courts are in total disagreement with the reluctance of American courts to interfere with a contract because the value of the item in question has changed since the agreement.
B)   European courts refuse to assume that parties accept the risk when they make a contract that the value might change later.
C)   European courts permit rescission of the contract for a mistake of value when the mistake involves more than 10 percent of the value at the time of the contract.
D)   European courts permit rescission of the contract for a mistake of value when the mistake involves more than 40 percent of the value at the time of the contract.
E)   European courts permit rescission of the contract for a mistake of value when the mistake involves more than 50 percent of the value at the time of the contract.F) B) and C)
G) A) and B)

Question 2

Which of the following occurs in Australia whenever an illegitimate threat is made to hold on to goods unless a payment is made or an agreement is entered into?

Accepted Answer

A)   Unconscionable duress
B)   Duress of goods
C)   Duress of merchandise
D)   Duress of trade
E)   Unreasonable duressF) A) and E)
G) None of the above

Question 3

Which of the following is true on appeal regarding the case of Mary W. Scott v. Mid-Carolina Homes Inc., discussed in the "Case Nugget" in which the plaintiff sued to recover damages after a salesperson allegedly mistakenly agreed to sell a mobile home to her for a price that was too low, later told her the mobile home could not be sold because of a bent frame, and then proceeded to sell it for a higher price to other buyers?

Accepted Answer

A)   The court refused to find that the defendant had the right to rescind the contract based on the alleged unilateral mistake.
B)   The court refused to find that the defendant had the right to rescind the contract because a mutual mistake was involved.
C)   The court found that the defendant had the right to rescind the contract because, even though the salesperson acted questionably, the plaintiff had not made a down payment.
D)   The court ruled that the defendant had the right to rescind the contract because a unilateral mistake was involved.
E)   The court ruled that the defendant had the right to rescind the contract because a mutual mistake was involved.F) B) and E)
G) C) and E)

Question 4

When a person who makes a misrepresentation has no knowledge about the falsity of the claim, it is said that the person lacked ____.

Accepted Answer

A)   Information
B)   Premeditation
C)   Planning
D)   Plotting
E)   ScienterF) A) and C)
G) B) and E)

Question 5

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?

Accepted Answer

A)   Fraudulent misrepresentation
B)   Undue influence
C)   Pressing dominance
D)   Pressing persuasion
E)   Relationship dominanceF) A) and E)
G) A) and D)

Question 6

Without legal assent a contract may be ____.

Accepted Answer

A)   Unmarketable
B)   Unchargeable
C)   Void
D)   Illegal
E)   VoidableF) C) and D)
G) None of the above

Question 7

Undue influence refers to those special relationships in which one person has taken advantage of his or her dominant position in a relationship to unduly persuade the other person and interfere with that person's ability to make his or her own decision.

Accepted Answer

A) True 
 B)False

Question 8

In cases where both parties to a contract are mistaken about either a current or a past material fact, either can choose to ______ the contract.

Accepted Answer

A)   Uphold
B)   Confirm
C)   Rescind
D)   Refute
E)   DisclaimF) None of the above
G) C) and D)

Question 9

When a mistake of fact occurs, ______ is absent.

Accepted Answer

A)   Legal coherence
B)   Bilateral understanding
C)   Joint reasoning
D)   Contractual concurrence
E)   Legal assentF) B) and E)
G) All of the above

Question 10

Which of the following is true regarding the effect of an innocent misrepresentation on a contract?

Accepted Answer

A)   It permits the party that was misled by the false statement to rescind the contract, but damages are not available.
B)   It permits the party who made the false statement to rescind the contract.
C)   It permits either the party that was misled by the false statement or the party who made the false statement to rescind the contract.
D)   The contract is automatically void and of no effect, and the party who was misled may recover damages.
E)   It permits either the party that was misled by the false statement or the party who made the false statement to rescind the contract, and it also makes the contract void and of no effect.F) A) and B)
G) B) and E)

Question 11

"Pet Pig Farm." Marcy wanted to buy Lucy's land and use it to breed small pigs to be kept as pets. Marcy told Lucy that having water on the property was very important although she did not mention to Lucy her plan to breed small pigs. Lucy assured her that a spring ran through one corner of the property. Therefore, Marcy agreed to buy the farm. Marcy, who loved pigs, assumed that the neighbors would be pleased with the pigs being in the area. Lucy also agreed to sell Marcy a used truck for $5,000. After the contract for the land sale was entered into, Marcy had a land survey done, and it was discovered that actually the spring did not run through the corner of Lucy's property. The area in which the spring ran actually belonged to a neighbor. Additionally, when Lucy brought Marcy the used truck, Marcy said, "That's not the truck!" It was discovered that Lucy, who had two trucks, thought that Marcy had bought the older truck although Marcy thought she had purchased the newer truck. Marcy was also surprised when she received a petition signed by all surrounding landowners objecting to the presence of the pigs and threatening to sue Marcy for nuisance. It will cost Marcy more than she had agreed to pay Lucy in order for Marcy to obtain a similar farm which actually has a spring on it.

-Which of the following would be the result if Marcy attempts to rescind the contract and recover damages only on the basis of the neighbor's objection to a pig farm?

Accepted Answer

A)   Marcy may rescind the contract and recover damages because Lucy made an implied misrepresentation.
B)   Marcy may rescind the contract but may not recover damages because Lucy made an implied misrepresentation.
C)   Marcy may recover damages but may not rescind the contract because Lucy made an implied misrepresentation.
D)   Marcy may not rescind the contract nor may she recover damages because she, Marcy, made a unilateral mistake.
E)   Marcy may rescind the contract but may not recover damages because she, Marcy, made a unilateral mistake.F) B) and E)
G) C) and D)

Question 12

Which of the following refers to an intentional failure to provide pertinent information about a projected contract?

Accepted Answer

A)   Concealment
B)   Nondisclosure
C)   Negligence
D)   Secretion
E)   EntombmentF) None of the above
G) C) and D)

Question 13

Scienter is present when the party accused of making the fraudulent assertion believed that the assertion was false or made the claim without any regard for whether it was true or false.

Accepted Answer

A) True 
 B)False

Question 14

Selma agreed to buy a used car from Hillary for $2,000. Hillary drew up the contract providing that the exchange would occur the next week. Unfortunately, Hillary was not very good with the keyboard and typed in $1,200 as the price of the car. Selma noticed that the contract said $1,200, not $2,000, and was very pleased. She signed it without saying anything. When it was time to make the exchange, Selma gave Hillary $1,200. In response to Hillary's inquiry regarding an additional $800, Selma pulled out the contract and showed her that it said $1,200. Hillary immediately responded that she had made a typographical error. Selma said that there was no mistake on her part because she knew exactly what she was doing and that she thought that Hillary had decided to give her a deal on the car. Which of the following is Hillary's best argument for a rescission of the contract?

Accepted Answer

A)   That a unilateral mistake was involved and that courts typically allow relief in situations involving unilateral mistakes as opposed to mutual mistakes.
B)   That the mistake resulted from a sale of goods, as opposed to the provision of services, and that courts are more likely to grant relief for a mistake when actual physical work is not involved.
C)   That because a bilateral contract, as well as a unilateral mistake was involved, most courts would grant relief.
D)   That the mistake resulted from an accidental clerical error and that it would be unconscionable to enforce the contract.
E)   That duress was involved because of Selma's wrongful behavior.F) A) and E)
G) None of the above

Question 15

For fraudulent misrepresentation to be the basis for a contract rescission, the statement of fact need not be an actual assertion.

Accepted Answer

A) True 
 B)False

Question 16

Mistakes in contract law result from untrue statements made by one party to the contract.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following was the result in Orville Arnold and Maxine Arnold v. United Companies and Michael T. Searls, involving the issue of whether an arbitration agreement entered into as part of a consumer loan transaction containing a substantial waiver of the consumer's rights, including access to the courts, while preserving for all practical purposes the lender's right to a judicial forum, is void as a matter of law?

Accepted Answer

A)   The court upheld the agreement based upon principles of freedom of contract.
B)   The court upheld the agreement as far as the plaintiffs' duty to arbitrate but stated that the same obligation would be imposed on the defendants.
C)   The court upheld the agreement so long as the parties agreed that plaintiffs would not be required to pay the defendants' attorney fees even if the defendants prevailed at arbitration.
D)   The court found that the waiver of the plaintiffs' rights to a judicial forum considered along with the defendants' retention of such rights and other unfair aspects of the agreement required a finding that the arbitration agreement was void.
E)   The court found that the agreement was void because a consumer loan transaction was involved.F) A) and E)
G) B) and E)

Question 18

As discussed in the text, which of the following is true regarding Japanese law and consumers?

Accepted Answer

A)   A special Consumer Contracts Law was developed to place consumers and businesses on a more equal footing in transactions.
B)   The Civil Code has more lax requirements regarding fraud than the country's Consumer Contracts law.
C)   The goal in regard to consumers is to form the law so that in litigation businesses are at a distinct disadvantage in regard to consumers.
D)   In order to encourage economic advancement and international investment, the goal is to form the law so that in litigation consumers are at a distinct disadvantage in comparison to businesses.
E)   Japanese law does not recognize rights of consumers as the buyer must beware.F) D) and E)
G) B) and E)

Question 19

"Scheming Friends." Willy very much wants to rent a basement apartment in Weaver's home. Willy threatens to tell all Weaver's friends that he and Weaver had been arrested for illegally smoking marijuana unless Weaver rents the apartment to him for $100 per month. (The information regarding the arrests is true.)  Weaver reluctantly agrees to rent the apartment to Willy for $100 per month. Willy also wants to buy Weaver's car. Weaver runs back the odometer on the car before Willy test drives it. Willy is impressed by the low mileage and agrees to buy the car. Weaver offers to sell Willy a ring for Willy's fiancée. Weaver tells Willy that the ring is a diamond and believes that to be true. After the deal is made, however, a jeweler friend of Weaver informs him that the ring is a fake. When Willy shows up with the money, Weaver says nothing. He just hands Willy the ring and takes the money. Later, Willy finds out that the odometer was run backwards from another friend to whom Weaver confided. Willy also finds out from his girlfriend that the ring is a fake.

-Which of the following would be the most likely result if Weaver attempts to rescind the agreement to rent the apartment?

Accepted Answer

A)   He will be able to rescind the agreement based upon Willy's threat of extortion.
B)   He will be able to rescind the agreement based upon the threat to Willy's economic interests.
C)   He will be able to rescind the contract because of undue influence.
D)   He will not be able to rescind the contract because he agreed to it.
E)   He will not be able to rescind the agreement unless he can show that he was not actually convicted of the crime alleged.F) B) and C)
G) D) and E)

Question 20

A negligent misrepresentation results when the party making the statement would have known the truth about the fact had he used reasonable care to discover or reveal it.

Accepted Answer

A) True 
 B)False

Exam 17: Legal Assent

Undue influence refers to those special relationships in which one person has taken advantage of his or her dominant position in a relationship to unduly persuade the other person and interfere with that person's ability to make his or her own decision.

Correct Answer
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A negligent misrepresentation results when the party making the statement would have known the truth about the fact had he used reasonable care to discover or reveal it.

Correct Answer
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Correct Answer
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Which of the following is true regarding European courts?

Correct Answer
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Without legal assent a contract may be ____.

Correct Answer
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Correct Answer
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For fraudulent misrepresentation to be the basis for a contract rescission, the statement of fact need not be an actual assertion.

Correct Answer
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Correct Answer
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Mistakes in contract law result from untrue statements made by one party to the contract.

Correct Answer
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As discussed in the text, which of the following is true regarding Japanese law and consumers?

Correct Answer
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Scienter is present when the party accused of making the fraudulent assertion believed that the assertion was false or made the claim without any regard for whether it was true or false.

Correct Answer
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Which of the following occurs in Australia whenever an illegitimate threat is made to hold on to goods unless a payment is made or an agreement is entered into?

Correct Answer
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Correct Answer
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In cases where both parties to a contract are mistaken about either a current or a past material fact, either can choose to ______ the contract.

Correct Answer
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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?

Correct Answer
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Which of the following is true regarding the effect of an innocent misrepresentation on a contract?

Correct Answer
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Correct Answer
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When a mistake of fact occurs, ______ is absent.

Correct Answer
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Which of the following refers to an intentional failure to provide pertinent information about a projected contract?

Correct Answer
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When a person who makes a misrepresentation has no knowledge about the falsity of the claim, it is said that the person lacked ____.

Correct Answer
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Exam 17: Legal Assent

Undue influence refers to those special relationships in which one person has taken advantage of his or her dominant position in a relationship to unduly persuade the other person and interfere with that person's ability to make his or her own decision.

Correct AnswerverifiedShow Answer

A negligent misrepresentation results when the party making the statement would have known the truth about the fact had he used reasonable care to discover or reveal it.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is true regarding European courts?

Correct AnswerverifiedShow Answer

Without legal assent a contract may be ____.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

For fraudulent misrepresentation to be the basis for a contract rescission, the statement of fact need not be an actual assertion.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Mistakes in contract law result from untrue statements made by one party to the contract.

Correct AnswerverifiedShow Answer

As discussed in the text, which of the following is true regarding Japanese law and consumers?

Correct AnswerverifiedShow Answer

Scienter is present when the party accused of making the fraudulent assertion believed that the assertion was false or made the claim without any regard for whether it was true or false.

Correct AnswerverifiedShow Answer

Which of the following occurs in Australia whenever an illegitimate threat is made to hold on to goods unless a payment is made or an agreement is entered into?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In cases where both parties to a contract are mistaken about either a current or a past material fact, either can choose to ______ the contract.

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

Which of the following is true regarding the effect of an innocent misrepresentation on a contract?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When a mistake of fact occurs, ______ is absent.

Correct AnswerverifiedShow Answer

Which of the following refers to an intentional failure to provide pertinent information about a projected contract?

Correct AnswerverifiedShow Answer

When a person who makes a misrepresentation has no knowledge about the falsity of the claim, it is said that the person lacked ____.

Correct AnswerverifiedShow Answer

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