Question 1

The party on whom duress is exerted can choose to carry out the contract.

Accepted Answer

A) True 
 B)False

Question 2

In selling a 300-acre tract to Organic Farm, Peyton tells the buyer that the land "will be worth twice as much by next year." This statement is not likely to support rescission of the contract because it is

Accepted Answer

A)  a material fact.
B)  a misrepresentation.
C)  a mistake.
D)  an opinion.E) B) and C)
F) B) and D)

Question 3

Restaurant Food Inc. intends to sell a certain quantity of beef for $1,100. In e-mail, however, the firm's sales representative mistakenly offers to sell the beef to Steak House for $1,000, Steak's manager immediately accepts. The seller

Accepted Answer

A)  is bound to the deal at the offered price.
B)  can rescind the deal.
C)  is bound to the deal but can charge the intended price.
D)  can rescind the deal and recover damages for the mistake.E) A) and D)
F) C) and D)

Question 4

Carlos and David contract for the sale of five hundred head of Carlos's cattle for $195 per head. Unknown to either party, an unforeseen storm has struck the herd and many of the cattle have died. David is

Accepted Answer

A)  entitled to recover the value of the lost cattle.
B)  not required to pay due to the bilateral mistake.
C)  not required to pay due to the unilateral mistake.
D)  required to pay because he assumed the risk the cattle might die.E) B) and C)
F) B) and D)

Question 5

One type of bilateral mistake can occur when a word or term in a contract is subject to more than one reasonable interpretation.

Accepted Answer

A) True 
 B)False

Question 6

Fra enters into a contract with Global Shipping Ltd. to insure and ship a painting from Holland 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

Accepted Answer

A)  allow the parties to rescind the contract.
B)  award damages to Fra for the mistake.
C)  award damages to Global for the mistake.
D)  enforce the contract as is.E) C) and D)
F) None of the above

Question 7

Raoul, who is Stef's guardian, convinces her to buy a certain parcel of land from Tyrone at a greatly inflated price. Raoul may be liable for

Accepted Answer

A)  duress.
B)  fraudulent misrepresentation.
C)  mistake.
D)  undue influence.E) C) and D)
F) None of the above

Question 8

Because of the potential for punitive damages, plaintiffs often include a claim for fraudulent misrepresentation in their contract disputes.

Accepted Answer

A) True 
 B)False

Question 9

County Title Company processes information furnished by others to transfer title to real estate from Dali to Ezra. The furnished information is mistaken. The contract between Dali and Ezra may be rescinded because the mistake

Accepted Answer

A)  may be rescinded because the mistake is about a material fact.
B)  may be rescinded if the mistake is subject to only one interpretation.
C)  none of the choices
D)  may be rescinded because the mistake affects a third party.E) A) and D)
F) B) and C)

Question 10

Each party to a contract assumes the risk that the value of the object of the deal will change in the future.

Accepted Answer

A) True 
 B)False

Question 11

A party who can show that he or she did not genuinely agree to the terms of a contract has a defense against its enforcement.

Accepted Answer

A) True 
 B)False

Question 12

Consent to the terms of a contract is voluntary even if one of the parties is forced into the agreement.

Accepted Answer

A) True 
 B)False

Question 13

Misrepresentation of law does not ordinarily entitle a party to avoid a contract.

Accepted Answer

A) True 
 B)False

Question 14

The presence of fraud does not affect the authenticity of the innocent party's consent to a contract.

Accepted Answer

A) True 
 B)False

Question 15

An innocent party who does not suffer harm as a result of a misrepresentation can nevertheless collect damages.

Accepted Answer

A) True 
 B)False

Question 16

Dyan enters into a contract with Eli, 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 claim, Dyan learns that Eli does not have access to the algorithm and files a suit, alleging fraud. Dyan must show harm to

Accepted Answer

A)  recover damages.
B)  rescind the contract.
C)  undo Eli's influence.
D)  punish the defendant.E) A) and B)
F) All of the above

Question 17

At an auction, Ben 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 Ben estimated, and thus is worth less as is, Ben is

Accepted Answer

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 the need for repair is not a material fact.E) All of the above
F) C) and D)

Question 18

Ray, an employee of Shipping Company, makes a substantial mathematical mistake in totaling estimated transportation costs for Tonnage Inc., which is seeking bids. Consequently, Shipping's bid is substantially low. Any contract with Tonnage that includes the mistake may be rescinded

Accepted Answer

A)  if the mistake was made inadvertently and without gross negligence.
B)  if the mistake was intentional.
C)  if the mistake was unilateral.
D)  under no circumstances.E) A) and B)
F) B) and C)

Question 19

A misunderstanding concerning a basic assumption on which a contract is made will support the rescission of the deal if the mistake is

Accepted Answer

A)  bilateral.
B)  unilateral.
C)  lateral.
D)  any of the choices.E) All of the above
F) None of the above

Question 20

Orin, an employee of Plumbing LLC, makes a substantial mathematical mistake in totaling the estimated costs for a project for which Quality Built Inc. is seeking bids. Consequently, Plumbing's bid is significantly low. Any contract with Quality Built that includes the mistake may be rescinded

Accepted Answer

A)  if Quality Built knew or should have known of the mistake.
B)  if Orin's supervisor did not know of the mistake.
C)  if Plumbing knew or should have known of the mistake.
D)  under no circumstances.E) A) and B)
F) A) and C)

Exam 15: Mistakes Fraud and Voluntary Consent

Ray, an employee of Shipping Company, makes a substantial mathematical mistake in totaling estimated transportation costs for Tonnage Inc., which is seeking bids. Consequently, Shipping's bid is substantially low. Any contract with Tonnage that includes the mistake may be rescinded

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

At an auction, Ben 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 Ben estimated, and thus is worth less as is, Ben is

Correct AnswerverifiedShow Answer

An innocent party who does not suffer harm as a result of a misrepresentation can nevertheless collect damages.

Correct AnswerverifiedShow Answer

Consent to the terms of a contract is voluntary even if one of the parties is forced into the agreement.

Correct AnswerverifiedShow Answer

Restaurant Food Inc. intends to sell a certain quantity of beef for $1,100. In e-mail, however, the firm's sales representative mistakenly offers to sell the beef to Steak House for $1,000, Steak's manager immediately accepts. The seller

Correct AnswerverifiedShow Answer

The party on whom duress is exerted can choose to carry out the contract.

Correct AnswerverifiedShow Answer

A misunderstanding concerning a basic assumption on which a contract is made will support the rescission of the deal if the mistake is

Correct AnswerverifiedShow Answer

Raoul, who is Stef's guardian, convinces her to buy a certain parcel of land from Tyrone at a greatly inflated price. Raoul may be liable for

Correct AnswerverifiedShow Answer

Because of the potential for punitive damages, plaintiffs often include a claim for fraudulent misrepresentation in their contract disputes.

Correct AnswerverifiedShow Answer

Each party to a contract assumes the risk that the value of the object of the deal will change in the future.

Correct AnswerverifiedShow Answer

A party who can show that he or she did not genuinely agree to the terms of a contract has a defense against its enforcement.

Correct AnswerverifiedShow Answer

One type of bilateral mistake can occur when a word or term in a contract is subject to more than one reasonable interpretation.

Correct AnswerverifiedShow Answer

Misrepresentation of law does not ordinarily entitle a party to avoid a contract.

Correct AnswerverifiedShow Answer

The presence of fraud does not affect the authenticity of the innocent party's consent to a contract.

Correct AnswerverifiedShow Answer

Fra enters into a contract with Global Shipping Ltd. to insure and ship a painting from Holland 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

Correct AnswerverifiedShow Answer

Carlos and David contract for the sale of five hundred head of Carlos's cattle for $195 per head. Unknown to either party, an unforeseen storm has struck the herd and many of the cattle have died. David is

Correct AnswerverifiedShow Answer

In selling a 300-acre tract to Organic Farm, Peyton tells the buyer that the land "will be worth twice as much by next year." This statement is not likely to support rescission of the contract because it is

Correct AnswerverifiedShow Answer

Orin, an employee of Plumbing LLC, makes a substantial mathematical mistake in totaling the estimated costs for a project for which Quality Built Inc. is seeking bids. Consequently, Plumbing's bid is significantly low. Any contract with Quality Built that includes the mistake may be rescinded

Correct AnswerverifiedShow Answer

County Title Company processes information furnished by others to transfer title to real estate from Dali to Ezra. The furnished information is mistaken. The contract between Dali and Ezra may be rescinded because the mistake

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified