Question 1

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.

Accepted Answer

The answer of In general,when one party who is not...

Question 2

Intent to deceive is also called scienter.

Accepted Answer

Intent to deceive is indeed referred to as scienter in legal terminology.

Question 3

Contracts involving fraud in the inception are voidable.

Accepted Answer

Contracts involving fraud in the inception are void, not voidable, because they lack genuine consent from the outset.

Question 4

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.

Accepted Answer

In contract law, a misrepresentation of law typically does not allow for rescission because it is assumed that both parties are aware of the legal implications, unlike misrepresentation of fact.

Question 5

Contracts involving fraud in the inducement are void.

Accepted Answer

Contracts involving fraud in the inducement are voidable, not void. The defrauded party has the option to affirm or rescind the contract.

Question 6

Fraudulent misrepresentation requires that the intent to deceive be proven.

Accepted Answer

Fraudulent misrepresentation requires that the person making the misrepresentation had the intent to deceive or knew the statement was false at the time it was made. Without intent, it cannot be considered fraudulent misrepresentation.

Question 7

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

Accepted Answer

Fraud in the inception refers to a situation where a person is deceived about the nature of the transaction itself, while fraud in the inducement involves deception about the terms or benefits of the transaction.

Question 8

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

Accepted Answer

Fraud in the inducement involves a misrepresentation that leads someone to enter into a contract or transaction, while fraud in the factum involves a misrepresentation that goes to the very nature of the contract or transaction itself. They are distinct legal concepts.

Question 9

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

Accepted Answer

Misrepresentation of law is generally not considered fraud because everyone is presumed to know the law, and thus, reliance on such misrepresentation is not justified.

Question 10

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

Accepted Answer

While parties to a contract have a duty to be honest and not make intentionally false statements, they do not generally have a duty to disclose all relevant facts unless there is a special relationship or a legal requirement to do so. This is known as the principle of caveat emptor, or "let the buyer beware." Exceptions may exist in certain industries or professions where disclosure is required by law or ethical standards.

Question 11

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

Accepted Answer

According to Section 161 of the Restatement (Second) of Contracts, if a party fails to disclose a fact which he has a duty to disclose, it is a misrepresentation if it would constitute a failure to act in good faith. Therefore, the statement in the question is true.

Question 12

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

Accepted Answer

Fraud by proxy involves a third party committing fraud on behalf of another, not merely concealing a material fact.

Question 13

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.

Accepted Answer

Fraud in the inducement occurs when the innocent party is aware of signing a contract, but they have been misled or deceived about the nature of the contract or the facts related to it. This misrepresentation leads them to enter into the contract under false pretenses.

Question 14

Ordinarily,silence does not constitute a misrepresentation.

Accepted Answer

Silence alone does not typically constitute a misrepresentation. However, there may be situations where silence could be misleading or fraudulent if there is a duty to disclose certain information. For example, if a seller knows of a defect in a product they are selling and does not disclose it, their silence could be considered a misrepresentation.

Question 15

Scienter means "innocent mind."

Accepted Answer

Scienter actually means knowledge or awareness of the wrongfulness of an action, particularly in the context of legal liability. It is the opposite of an innocent mind.

Question 16

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.

Accepted Answer

Fraud in the factum, also known as fraudulent inducement, occurs when a person is misled or deceived about the nature of their actions, thereby lacking the required knowledge to give informed consent. As a result, the contract or agreement may be voidable.

Question 17

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

Accepted Answer

Fraud in the inception occurs when a party is misled about the true nature of a document being signed, and therefore leads to the signing of the document under false pretenses.

Question 18

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

Accepted Answer

Scienter, or the intent to deceive, is required for fraudulent misrepresentation but not for innocent misrepresentation, which occurs without intent to deceive.

Question 19

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

Accepted Answer

Fraud in the inception refers to a situation where fraud exists at the time the contract is formed, whereas fraud by concealment refers to a situation where one party actively conceals material information from the other party during the contract formation process. While both involve fraud in the context of a contractual relationship, they are distinct concepts and not interchangeable terms.

Question 20

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

Accepted Answer

The answer of Fraud by containment occurs when one party...

Quiz 12: Genuineness of Assent and Statute of Frauds