Question 1

________ is a situation in which one party threatens to do a wrongful act unless the other party enters into a contract.
A)Scienter
B)Duress
C)Battery
D)Assault

Accepted Answer

Duress is a situation in which one party coerces another party to enter into a contract by using physical force, threats, blackmail, or other improper means. In this situation, the contract is voidable as it lacks the element of voluntary consent.

Question 2

Duress occurs when one person takes advantage of another person's mental,emotional,or physical weakness and unduly persuades that person to enter into a contract.

Accepted Answer

Duress involves the use of force, threats, or coercion to compel someone to act against their will or to enter into a contract, rather than taking advantage of their weaknesses.

Question 3

A contract involving mutual mistake of value is ________.
A)rescindable
B)ambiguous
C)enforceable
D)void

Accepted Answer

A mutual mistake of value does not typically render a contract unenforceable because it pertains to the value the parties assign to the contract's subject matter, not to the fundamental aspects of the contract itself.

Question 4

A unilateral mistake occurs if both parties know the object of the contract but are mistaken as to its value.

Accepted Answer

A unilateral mistake occurs when only one party is mistaken about the object or subject matter of the contract.

Question 5

A contract cannot be rescinded if there has been a mutual mistake.

Accepted Answer

A contract can be rescinded if there has been a mutual mistake. A mutual mistake occurs when both parties to a contract are mistaken about a material fact upon which the contract is based. In such cases, the contract may be rescinded or reformed to reflect the parties' true intentions.

Question 6

The term scienter refers to the knowledge that a representation is false or that it was made without sufficient knowledge of the truth.

Accepted Answer

Scienter refers to the knowledge or intent to deceive, which can include knowledge that a representation is false or made without sufficient knowledge of the truth.

Question 7

Intentional misrepresentation is considered fraud.

Accepted Answer

Intentional misrepresentation with the purpose of deceiving someone is considered fraud.

Question 8

A misrepresentation is considered fraud even if it is made without the intent to deceive another party.

Accepted Answer

Misrepresentation becomes fraud when it is made knowingly, without belief in its truth, or recklessly, without caring whether it is true or false, with the intent to deceive another party. Without the intent to deceive, it may still be a misrepresentation but not necessarily fraud.

Question 9

Which of the following scenarios makes Tim liable for undue influence?
A)He uses a false identity,borrows $10,000 from Kelly,and disappears with the money.
B)He threatens to kill Carlos if Carlos does not sign a contract that transfers all his property to Tim.
C)He takes advantage of his grandmother's illness and persuades her to sign a will,leaving all of her property to him.
D)He threatens to bring a lawsuit against Carlos if Carlos does not make him a partner in his firm.

Accepted Answer

Undue influence occurs when someone takes advantage of a vulnerable person to gain control over their decisions. In this scenario, Tim is taking advantage of his grandmother's illness to convince her to leave all her property to him, which would be considered undue influence. The other scenarios involve fraud (A), coercion (B), and blackmail (D), but not necessarily undue influence.

Question 10

A unilateral mistake is a mistake in which only one party is mistaken about a material fact regarding the subject matter of a contract.

Accepted Answer

A unilateral mistake occurs when only one party is mistaken about a material fact, while the other party knows or has reason to know of the mistake. In such cases, the mistaken party may be able to rescind the contract or seek reformation, depending on the circumstances.

Question 11

In order to prove fraud,which of these elements must be shown?
A)The innocent party knew the wrongdoer.
B)The innocent party detected the misrepresentation prior to the contract's formation.
C)The wrongdoer assumed a false identity.
D)The innocent party justifiably relied on the wrongdoer's misrepresentation.

Accepted Answer

To prove fraud, it must be shown that the innocent party justifiably relied on the wrongdoer's misrepresentation. This means that the innocent party must have relied on the misrepresentation to enter into the contract and that the reliance was reasonable under the circumstances. The other options listed (A, B, and C) are not necessary or relevant elements for proving fraud.

Question 12

A(n)________ is an event that occurs when one person consciously decides to induce another person to rely and act on a misrepresentation.
A)fraudulent misrepresentation
B)unilateral mistake
C)bilateral mistake
D)erroneous misrepresentation

Accepted Answer

A fraudulent misrepresentation is when one person intentionally makes a false statement or conceals information in order to induce another person to rely on it and act on it. This is different from a unilateral mistake, where one person makes a mistake without the other person's involvement, and a bilateral mistake, where both parties make a mistake. An erroneous misrepresentation is not a commonly used legal term.

Question 13

A material fact is a fact that is irrelevant to the subject matter of a contract but pertains to the conduct of the parties.

Accepted Answer

A material fact is a fact that is relevant to the subject matter of a contract, not irrelevant. It is a fact that would influence a reasonable person's decision to enter into the contract.

Question 14

Heather chooses to buy a scarf from Macy's and reads the price on the tag as $50.She uses her credit card to pay for the scarf,but only after the purchase does she notice that the price tag actually says $500.This is an instance of a(n)________.
A)bilateral mistake
B)mutual mistake of value
C)innocent misrepresentation
D)unilateral mistake

Accepted Answer

This is an example of a unilateral mistake, where only one party (Heather) is mistaken about a fundamental aspect of the agreement, in this case, the price of the scarf.

Question 15

Duress is a situation in which one party threatens to do a wrongful act unless the other party enters into a contract.

Accepted Answer

This is the definition of duress in contract law. It is considered a form of coercion and can render a contract voidable.

Question 16

Duress only occurs when a threat involves physical harm.

Accepted Answer

Duress refers to a threat that causes one to act against their will. The threat can involve physical harm, but it can also involve other types of harm such as harm to one's reputation or financial harm. Therefore, duress can occur even if physical harm is not present.

Question 17

The measure of damages awarded to an innocent party for fraud is the difference between the value of the property as represented and the actual value of the property.

Accepted Answer

This is known as the "out of pocket" measure of damages for fraud. It is designed to make the innocent party whole by placing them in the position they would have been in had the misrepresentation not occurred.

Question 18

An ambiguity in a contract may constitute a mutual mistake of a material fact.

Accepted Answer

An ambiguity in a contract may result in the parties having different understandings of a material fact. This can be considered a mutual mistake and may impact the validity of the contract.

Question 19

Which of the following is true of a unilateral mistake?
A)Only one mistake or ambiguity is present in the subject matter of entire contract.
B)Out of several contracts drafted simultaneously between two parties,one has a mistake in its subject matter that does not concern the other contracts.
C)Only one party is mistaken about a material fact regarding the subject matter of a contract.
D)A single mistake about a material fact in the subject matter of a contract appears several times in the contract.

Accepted Answer

A unilateral mistake is when only one party involved in the contract is mistaken about a material fact regarding the subject matter of the contract. It is important to note that the mistake must be material, meaning it significantly impacts the agreement, in order for it to be considered a unilateral mistake. Choices A, B, and D are not accurate definitions of a unilateral mistake.

Question 20

To be actionable as fraud,the misrepresentation must be the sole factor in inducing the innocent party to enter into the contract.

Accepted Answer

To be actionable as fraud, the misrepresentation does not need to be the sole factor in inducing the innocent party to enter into the contract; it only needs to be a significant factor.

Quiz 10: Performance and Breach of Contracts

________ is a situation in which one party threatens to do a wrongful act unless the other party enters into a contract.

Duress occurs when one person takes advantage of another person's mental,emotional,or physical weakness and unduly persuades that person to enter into a contract.

A contract involving mutual mistake of value is ________.