Deck 12: Genuineness of Assent and Statute of Frauds

Question 1

To prove fraud,the following elements must be shown: 1)The wrongdoer made a false representation of a material fact; 2)The wrongdoer intended to deceive the innocent party; 3)The innocent party unjustifiably relied on the misrepresentation; and 4)The innocent party was injured.

Answer 1

False

Question 2

Negligent misrepresentation is commonly referred to as fraudulent misrepresentation.

Answer 2

False

Question 3

A mistake will never affect whether assent to a contract is genuine.

Answer 3

False

Question 4

It is possible to commit a fraud by remaining silent and not saying anything.

Question 5

A fraudulent misrepresentation made in order to receive a policy of life insurance may result in the company not having to pay on the policy.

Question 6

An ambiguity in a contract cannot constitute a mutual mistake of a material fact.

Question 7

In a contract situation involving fraud,the innocent party can either rescind the contract and obtain restitution,or enforce the contract and sue for contract damages.

Question 8

If there has been a mutual mistake,the contract may be rescinded on the grounds that no contract has been formed because there has been no "meeting of the minds" between the parties.

Question 9

Where two parties contract for the sale of an old violin,but neither party realizes that it is a rare and extremely valuable violin,this is a mutual mistake of fact allowing rescission.

Question 10

A mutual mistake of fact is more likely to result in a party being able to rescind a contract than is a mutual mistake as to value.

Question 11

A defense to the enforcement of a contract is that the assent of one or both of the parties to the contract was not genuine or real.

Question 12

The law permits rescission of some contracts made in mistake.

Question 13

Unilateral mistakes occur when only one party is mistaken about a material fact regarding the subject matter of the contract.

Question 14

A unilateral mistake can be so serious that it results in an unconscionable contract.

Question 15

When fraudulent misrepresentation is used to induce another party to enter into a contract,the innocent party's assent to the contract is not genuine,and the contract is void.

Question 16

Generally,a unilateral mistake does not allow either party to rescind the contract.

Question 17

A misrepresentation occurs when an assertion is made that is not in accord with the facts.

Question 18

One situation in which a contract may not be enforced due to a unilateral mistake is when a party makes a unilateral mistake of fact and the other party either knew or should have known that a mistake was made.

Question 19

A mutual mistake of value results in a void contract.

Question 20

A party may not rescind a contract if there has been a mutual mistake of a past or existing material fact.

Question 21

In general,when one party who is not a professional makes a misrepresentation about the law to the other party to a contract,the deceived party can avoid the contract on the basis of the misrepresentation.

Question 22

Intent to deceive is also called scienter.

Question 23

Contracts involving fraud in the inception are voidable.

Question 24

With a misrepresentation of law,the innocent party cannot generally rescind the contract,because each party to a contract is assumed to know the law that applies to the transaction.

Question 25

Contracts involving fraud in the inducement are void.

Question 26

Fraudulent misrepresentation requires that the intent to deceive be proven.

Question 27

Fraud in the inception is also known as fraud in the inducement.

Question 28

Fraud in the inducement is also known as fraud in the factum.

Question 29

Usually,a misrepresentation of law is not actionable as fraud.

Question 30

In general,a party to a contract has a duty to disclose all relevant facts to the other party.

Question 31

According to the Restatement (Second)of Contracts,nondisclosure is a misrepresentation if it would constitute a failure to act in "good faith."

Question 32

Fraud by proxy occurs when one party takes specific action to conceal a material fact from another party.

Question 33

Fraud in the inducement occurs when the innocent party knows what he or she is signing but has been fraudulently induced to enter into the contract.

Question 34

Ordinarily,silence does not constitute a misrepresentation.

Question 35

Scienter means "innocent mind."

Question 36

Fraud in the factum occurs if a person is deceived as to the nature of his or her act and does not know what he or she is doing.

Question 37

Fraud in the inception exists when a party is deceived as to the nature of a document being signed.

Question 38

Scienter is a necessary element that must be proven for both innocent and fraudulent misrepresentation.

Question 39

Fraud in the inception and fraud by concealment are interchangeable terms.

Question 40

Fraud by containment occurs when one party takes specific action to conceal a material fact from another party.

Question 41

If an innocent misrepresentation is made,the aggrieved party may rescind the contract but may not sue for damages.

Question 42

Most,but not all,states have enacted a statute of frauds.

Question 43

A misrepresentation of law is allowed as grounds for rescission of a contract if one party to the contract is a professional who should know what the law is and intentionally misrepresents the law to a less-sophisticated contracting party.

Question 44

A fully-performed oral contract that should have been in writing under the Statute of Frauds can be rescinded by either party.

Question 45

The threat to bring a civil lawsuit in order to obtain a settlement agreement can be duress,even if the lawsuit is legitimate.

Question 46

Quite frequently,an innocent misrepresentation constitutes fraud.

Question 47

A contract that is entered into because of undue influence is voidable by the innocent party.

Question 48

Undue influence can occur when both parties are equal in mental,emotional and physical strength.

Question 49

Generally speaking,an oral contract that the Statute of Frauds requires to be in writing is unenforceable by either party.

Question 50

Gifts and donations to religious organizations are exempt from ever being considered as given under undue influence.

Question 51

To establish undue influence,the dominant party must have unduly used his or her influence to persuade the servient party to enter into a contract.

Question 52

Duress requires an unwanted touching or physical threat forcing a party into a contract.

Question 53

In order to be enforceable,any lease involving real property must be in writing.

Question 54

Undue influence can provide a basis to avoid a contract only if the parties had a preexisting confidential or fiduciary relationship at the time of contract formation.

Question 55

In order to be enforceable,contracts to pay debts barred by the statute of limitations must be in writing.

Question 56

The primary purpose of the Statute of Frauds is to punish people who perpetrate frauds by using written contracts.

Question 57

A contract to purchase a $399 television must be in writing in order to be enforceable.

Question 58

In a situation involving undue influence,the dominant party is known as the servient party.

Question 59

The threat to commit extortion unless someone enters into a contract constitutes duress.

Question 60

In order to be enforceable,contracts to pay compensation for services rendered in negotiating the purchase of a business must be in writing.

Question 61

The Statute of Frauds does not allow the integration of documents.

Question 62

The "part performance" exception to the Statute of Frauds allows a court to partially enforce any oral contract that is required to be in writing under the Statute of Frauds.

Question 63

Many state Statutes of Frauds require that agents' contracts to sell real property covered by the Statute of Frauds be in writing to be enforceable.This requirement is often referred to as the equanimity rule.

Question 64

Integration may be by an express reference in one document that refers to and incorporates another document within it.This procedure is called ratification by reference.

Question 65

The Statute of Frauds section involving promises in consideration of marriage requires prenuptial agreements to be in writing in order to be enforceable.

Question 66

To be sufficient under the Statute of Frauds,only original,handwritten signatures in ink are considered acceptable.

Question 67

Mike hires Stephen to paint his house.The contract stipulates that Mike will provide the paint and equipment and that Stephen will provide the labor for which he will be paid $1,000.This contract must be in writing according to the Statute of Frauds.

Question 68

Generally,an executory contract that is not in writing even though the Statute of Frauds requires it to be is unenforceable by either party.

Question 69

If there is an ambiguity in a contract,the ambiguity will be resolved against the party who drafted the contract.

Question 70

Because of the formality required by the Statute of Frauds,a contract must have been drafted by an attorney in order to meet the Statute of Frauds requirements.

Question 71

The one-year rule under the Statute of Frauds measures the year from the time of contract formation and not from the time that performance of the contract begins.

Question 72

Guaranty contracts are not required to be in writing under the Statute of Frauds.

Question 73

Consistent with judicial standards of interpretation,where a preprinted form contract is used,handwritten words prevail over both preprinted and typed words.

Question 74

A collateral promise occurs when the person making the promise agrees to be liable for the debt of another person.

Question 75

Fred and Barney enter into a sales contract for $400.Subsequently,they modify the contract and the modification adds $400 more to the contract.Neither the original contract nor the modification need be in writing.

Question 76

Although the common law of contracts permits several writings to be integrated to form a single written contract,the Uniform Commercial Code (UCC)does not.

Question 77

Consistent with judicial standards of interpretation,where a preprinted form contract is used,preprinted words prevail over typed words.

Question 78

As long as other requirements are met,a writing may satisfy the Statute of Frauds even if it is on a paper towel.

Question 79

To be sufficient under the Statute of Frauds,a writing must be signed by both parties to the contract.

Question 80

When interpreting a contract with contradictory language,a specific term will take precedence over a conflicting general provision.