Deck 8: Grounds Upon Which a Contract May Be Impeached: Mistake

Question 1

A mistake in contract law that leads to a reversal of a contract can be one that is made by

A) one party without the other's knowledge of the mistake.
B) both parties.
C) both parties with the knowledge of third parties.
D) one party with the other's knowledge of the mistake.
E) one party with the knowledge of third party.

Answer 1

A

Question 2

A pleas of non est factum

A) means the contract is not correct.
B) is not a good defence against third parties.
C) can only be raised if there is a misrepresentation.
D) is applicable only where both parties have made a mistake.
E) means it is not my doing.

Answer 2

E

Question 3

A mistake in contract law can lead to a reversal of a contract if

A) it is in regard to a minor characteristic of the subject matter.
B) it causes the mistaken party to believe that the subject matter is fundamentally different from what it truly is.
C) it is in regard to a major characteristic of the subject matter.
D) A & B
E) B & C

Answer 3

E

Question 4

McKenzie purchases goods from Dormond. Later McKenzie goes to court and the court declares that the contract between McKenzie and Dormand is void. This means that

A) McKenzie can keep the goods and demand his money back from Dormond.
B) The court has declared that there was a valid contract between Dormond and McKenzie from the date of the purchase, until the date of the Court ruling.
C) Dormond has to return all money received from McKenzie, but McKenzie does not have to return the goods.
D) The court has declared that Dormond breached the contract.
E) McKensie can return all or the remainder of the goods to Dormond in exchange for reimbursement of payment.

Question 5

Cal contracts to sell 1,000 logs to Doris at a price of $250 per log. Cal believes that the logs are worth only $150 per log. When Doris finds out the true value of the logs, she refuses to buy them. Cal's contract with Doris is:

A) unenforceable
B) enforceable
C) voidable
D) void
E) illegal

Question 6

In a legal sense, mistake is

A) an error of judgment.
B) narrowly defined and limited in scope.
C) a misrepresentation.
D) a mistake of fact.
E) a misunderstanding.

Question 7

Joe buys two tickets for a baseball game. Two days after he purchases the tickets the game is cancelled. Joe, wanting to get his money back, sells the second ticket to Mary. Which of the following is NOT true?

A) Joe made an offer and Mary accepted the offer.
B) A contract did not arise between Joe and Mary regarding the sale of the ticket.
C) Mary can set aside the contract because of frustration.
D) Mary may sue Jack for breach of contract.
E) Mary can have the contract set aside because of mistake.

Question 8

Mistake about terms DOES NOT include

A) the error of judgment that a party makes when he or she enters into a bad contract.
B) misunderstandings about the meanings of words used in a contract.
C) words used inadvertently in stating the terms of a contract.
D) the attribution by the parties of different meanings to words used in a contract.
E) errors that are made in the recording of an agreement between parties.

Question 9

Rectification will be ordered where

A) the parties wish to change certain terms in the contract.
B) the offeror misrepresented certain facts.
C) one of the parties to the contract lacks legal capacity.
D) the wrong party performs the contract.
E) there is a complete unambiguous agreement that was recorded incorrectly.

Question 10

When a court declares a contract to be void,

A) the contract that arose is ended by the court.
B) the offeree obtains title to the goods and is obliged to pay for them.
C) the contract is frustrated.
D) it is as if the contract never arose or existed.
E) the offeror is required to enter into a new contract with the offeree.

Question 11

Where a party claims that an agreement is improperly recorded, that party may ask the court

A) to set aside the contract.
B) interpret the provisions of the contract.
C) to re- write the contract.
D) to compensate it for any loss suffered.
E) for rectification of the contract.

Question 12

When a Court grants rectification of a contract it

A) declares a contract to be unenforceable.
B) it interprets the contract for the parties.
C) changes the part of the document that was incorrect in the written document.
D) it declares the contract to be voidable.
E) its sets aside the contract.

Question 13

Jonathan sells crates of tomatoes on board the SS Apapa to Margaret. At the time of the sale, both parties are unaware that the crates were washed overboard. What is the status of the contract between Jonathan and Margaret.

A) Margaret may sue Jonathan for the tort of deceit.
B) Margaret is the new owner of the tomatoes and has to bear the loss.
C) Jonathan is still the owner of the shipment. Jonathan bears the loss and will have to refund Margaret's money.
D) The ownership passed to Margaret, but Jonathan is still in possession and so he is liable.
E) Margaret has to pay the agreed price and recover from her insurance.

Question 14

In contract law a mistake is

A) an error about the terms of the contract, or the assumptions regarding important facts related to the contract.
B) a false statement made by one party that causes someone to enter a contract.
C) unfair manipulation that compromises someone's free will.
D) an error of judgment about the benefits of a contract.
E) the threat of physical or economic harm that results in a contract.

Question 15

A voidable contract

A) is one that a court may set aside in an attempt to restore the parties to their original positions.
B) is a contract that is void.
C) is a contract that has been frustrated.
D) is a contract in which the offeree failed to undertake the proper investigations.
E) is a contract in which the parties have engaged in conduct that is illegal.

Question 16

Which of the following is not a condition that must be met by a plaintiff who request rectification of a contract?

A) The plaintiff must satisfy the court that all attempts to reach some understanding between the parties has failed.
B) The plaintiff must satisfy the court that there was a complete agreement between the parties, free from ambiguity.
C) The plaintiff must establish that the change in the written document appears to be an error in the recording of the document and is easily explained as such.
D) The plaintiff must satisfy the court that the agreement is not subject to, or conditional on any further adjustments.
E) The plaintiff must establish that the parties did not engage in further negotiations to amend the contract.

Question 17

James says to Jack. I am selling my "Toyoda" for $500. Would you like to buy it. Jack, believing that James was referred to his automobile, replies, "yes I'll buy your Toyota for $500." Jack pays $500 and James presents him with a Japanese doll called Toyoda. Jack asks for his money back because he misunderstood James. Should this matter go to court, the court will most likely find that

A) there is a binding contract for the sale of the Toyota car because James should have made it clear what he was selling.
B) there is a binding contract for the sale of the Toyoda because that is what James meant when he made the offer.
C) no contract arose because a reasonable person would not believe that James would offer to sell his car for $500.
D) Jack's refusal to pay is a breach of contract.
E) there is a binding contract for the sale of the Toyota because that is the offer Jack believed he was accepting.

Question 18

A court will not enforce a contract if:

A) the meanings of the words are not clear
B) one party was unreasonable in using certain words.
C) there are two reasonable interpretations of words in the contract and no indication which is correct
D) a party is mistaken as to what the subject- matter of the contract was
E) the parties disagree as to the interpretation of important terms

Question 19

The law recognizes two kinds of mistakes. These are .

A) mistake about the terms of a contract and mistakes in assumptions about important facts related to the contract
B) errors of judgment and recklessness in tort
C) errors of judgment in tort and innocent criminal errors
D) forgetfulness and recklessness
E) unknowing errors and knowing errors

Question 20

In executing its discretion to grant relief when a party makes a mistake about terms,

A) the court will determine each party's interpretation of the terms.
B) the court will adopt the position of the plaintiff.
C) the court will correct the document.
D) the court will consider the hardship that will be suffered by each party.
E) the court will determine the burden of proof.

Question 21

Non est factum is most likely available

A) where the offeror's statements are misunderstood by the offeree.
B) where there has been a misrepresentation.
C) where a party claiming the remedy has been deliberately tricked into entering into a contract.
D) where both parties are mistaken as to the terms of a contract.
E) where the party seeks rectification.

Question 22

Where a party inadvertently uses the wrong words in stating the terms of a contract, and another party enters into the contract, the court may set aside the contract if a reasonable bystander would conclude that the party made a mistake.

Question 23

Where a mistake is made in a contract, and the contract contemplates some level of risk, then

A) the court will grant relief to the party adversely affected by the change in accordance with the degree of the effect of the change.
B) the court will not grant relief to the party adversely affected by the change.
C) each party is required to act to mitigate its loss.
D) the court will apply the principles of equity, allocate the risk and apportion the loss.
E) the change that takes place becomes a legal mistake.

Question 24

Rectification is where a written contract is changed to reflect a previously agreed upon oral agreement. The courts will grant rectification if

A) both parties claim that the agreement was incorrectly recorded.
B) the oral agreement was somewhat ambiguous.
C) the written document appears to have an error in its recording.
D) further negotiations had discussed the proposed change.
E) the written contract contains the whole of the agreement.

Question 25

A plea of non est factum cannot be used against a third party who has been tricked.

Question 26

Frustrating events are the same as mistakes.

Question 27

Where the wrong words are inadvertently used by a party in stating the terms of a contract, resulting in a mistake, the contract will be binding on the party if it was reasonable for the other party to rely on the words used.

Question 28

Builder and owner enter into a contract to have a building built. At the time they entered into the contract they were unaware that there was an underground stream below the site that would make the construction impossible. The contract has been discharged due to frustration.

Question 29

A legal mistake is an error in judgment.

Question 30

Mistake takes place after the formation of the contract, and frustration occurs at the time of the formation of the contract.

Question 31

Where a contract involves a level of risk, a court will most likely not grant relief to the party adversely affected by a mistake.

Question 32

The most fundamental mistake that radically changes the nature of the bargain of the parties is a mistake about the existence of the subject matter of the contract.

Question 33

If at the time of entering into a contract unbeknown to the purchaser or the seller, the subject matter did not exists, the contract is

A) voidable at the option of the court.
B) void, according to the Sale of Goods Act as well as under the Common Law.
C) a mistake in terms of fact and not assumption.
D) subject to the tort of deceit.
E) valid, the purchaser stands the loss.

Question 34

Mistake about terms includes the inadvertent use of wrong words.

Question 35

Michael obtained rectification in a court settlement. Now he can

A) abandon his claims on the original contract.
B) resume the contract negotiations.
C) require that the other party perform its contract.
D) exercise choices under the concept of voidability.
E) collect any damages requested.

Question 36

If the parties disagree over what the words in a contract mean, the court will declare the contract void.

Question 37

Jack, a sales agent, approaches Edmund and tells Edmund about a product he is selling. Jack convinces Edmund to purchase the product and Edmund is asked to sign a document. Later Edmund realizes that the document is very different from what he was told. Edmund may plead non est factum.

Question 38

A quasi- contract is an obligation that may arise because one party has received an unfair benefit and not because of direct contractual relationship.

Question 39

James purchases an antique chair at a garage sale for $150.00. Later he sells it to Jacqueline for $300 and makes a nice profit. A few months later the Antiques Road Show comes to town and Jacqueline takes the chair to the show to be valued. She is advised that the chair dates as far back as 1866 and is worth approximately $5,000. Which of the following is true?

A) James did not make a legal mistake because he was careless in determining the right price.
B) James can plead non est factum.
C) If Jacqueline sells the chair, the court will order that Jacqueline pay a portion of the proceeds of sale to James because James made a mistake.
D) James made a mistake about the value of the chair and so the contract will be set aside by a court.
E) James did not make a mistake about the value of the chair because the radically different price is one of the risks expected in the contract.

Question 40

In a contract involving risk a court will not grant relief to a party adversely affected by a mistake because the party knew of the risk.

Question 41

What is rectification? How is it used by courts in situations involving mistake in law.

Question 42

What is a "snapped up offer" and what are the consequences?

Question 43

Explain the concept of rescission as it relates to mistake in contract law.

Question 44

Explain the meaning of rescission.

Question 45

What is unjust enrichment? What remedy will the courts grant if unjust enrichment is established by a plaintiff?

Question 46

What is the difference between a void and a voidable contract?

Question 47

What is rescission. Explain how rescission relates to mistake in contract law.

Question 48

What are the two main types of mistake in contract law?

Question 49

Frustrating events are different from mistakes. Explain.

Question 50

What is rectification? Explain its use by courts in situations involving mistake in law.

Question 51

A party who seeks rectification of a document must satisfy the conditions for rectification. Explain.

Question 52

Explain the concept of non est factum and how this concept has evolved over the years.