Question 1

Huey, a tennis pro, convinces Ian, who has no athletic ability, that he has considerable skill and induces him to pay $1,000 for tennis lessons. This is most likely

Accepted Answer

The answer of Huey, a tennis pro, convinces Ian, who...

Question 2

Beryl enters into a contract with Clay for a guided tour of Deep Canyon. Clay represents that he is an experienced, knowledgeable guide, when in reality he has never been in the canyon. Most likely, Beryl

Accepted Answer

Beryl can rescind the deal based on fraudulent misrepresentation because Clay falsely represented his experience and knowledge, which likely influenced Beryl's decision to enter into the contract.

Question 3

Fess convinces Gwyn to enter into a contract for the purchase of a Falafel Waffle Food Cart by knowingly misrepresenting a number of material features about the facility and the business. Most likely, Gwyn can rescind the contract on the basis of

Accepted Answer

Fraudulent misrepresentation occurs when one party knowingly makes a false statement of material fact, intending the other party to rely on it, and the other party does rely on it to their detriment. Since Fess knowingly misrepresented material features about the facility and the business, Gwyn can most likely rescind the contract on the basis of fraudulent misrepresentation.

Question 4

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 Any contract with Tonnage that includes the mistake may be rescinded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 unilateral mistake that is made inadvertently and without gross negligence can be grounds for rescission of a contract if the mistake is substantial and the other party has not relied to their detriment on the mistake.

Question 5

Ked, a real estate agent, assures Lida that a certain parcel of commercial property fronts on the most highly trafficked street in Metro City. Lida buys the property and then discovers that the street has no more traffic than any other in its vicinity. Lida may recover damages for

Accepted Answer

Lida may recover damages for the agent's fraudulent misrepresentation because Ked, the real estate agent, made a false statement about the property's location on the most highly trafficked street, which influenced Lida's decision to purchase.

Question 6

A contract that includes a bilateral mistake may be rescinded if the mistake involves

Accepted Answer

A contract may be rescinded if there is a bilateral mistake involving a material fact, as this affects the foundation upon which the agreement was made.

Question 7

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

The contract between Dali and Ezra may be rescinded because the mistake about a material fact (the information on which the transfer of title is based) affects the essence of the contract, making it voidable at the option of the adversely affected party.

Question 8

Alvin induces Beth to enter into a contract for the purchase of a Chef's Burger restaurant. Alvin knowingly misrepresents a number of material features about the restaurant and the business. When Beth discovers the truth, she can rescind the contract on the basis of

Accepted Answer

Beth can rescind the contract on the basis of fraudulent misrepresentation because Alvin knowingly misrepresented material features about the restaurant and the business, which influenced Beth's decision to enter into the contract.

Question 9

Denis sells a motorcycle to Elton without disclosing that the odometer, which reads 10,000 miles, was disconnected 100,000 miles ago. Denis is most likely liable for

Accepted Answer

Denis is likely liable for fraudulent misrepresentation because he sold the motorcycle to Elton without disclosing that the odometer had been disconnected 100,000 miles ago, which is a deliberate omission of a material fact that misled Elton about the motorcycle's true mileage.

Question 10

Analytics LLC processes misinterpreted data furnished by Botch Services to propose a marketing plan for Clientele Inc. Analytics and Clientele are both ignorant of the mistaken data. Their contract can be rescinded on the basis of

Accepted Answer

A bilateral mistake occurs when both parties to a contract are mistaken about a basic assumption on which the contract was made, which is the case here since both Analytics LLC and Clientele Inc. are unaware of the misinterpreted data affecting their agreement.

Question 11

Mary owns two all-terrain vehicles (ATVs), worth $1,000 and $500, respectively. Neil enters into a contract to buy "Mary's ATV" for $750. Mary believes, in good faith, that she is selling the $500 ATV. Neil believes, in good faith, that he is buying the $1,000 ATV. In this situation

Accepted Answer

The contract is not enforceable due to a mutual mistake regarding the identity of the ATV being sold. Both parties have a different understanding of which ATV is being sold, which means there is no "meeting of the minds," a necessary element for a valid contract.

Question 12

Open Range agrees to sell Pinewood Ranch a remote parcel of land for $15,000. Both parties believe the land to be worthless, but beneath it is shale rock containing oil. A court would

Accepted Answer

The contract would not be rescinded because the mistake was mutual and pertained to the value of the land, not the nature of the agreement itself. Both parties were mistaken about the value of the land due to the undiscovered oil, but this does not invalidate the contract. Mistakes of value, where both parties are unaware of the true value of the subject of the contract, typically do not provide grounds for rescission.

Question 13

Car Lot's salesperson Dirk offers to sell Espy, who is twenty years old, a car. Dirk intentionally misrepresents the vehicle's use and repairs. In reliance, Espy buys the car. To prove fraud, Espy does not have to show that

Accepted Answer

Espy's age is irrelevant to proving fraud. The key elements to prove fraud include intentional deception, misrepresentation of material facts, and justifiable reliance on the misrepresentation. Age does not impact the validity of these elements.

Question 14

Bram, a salesperson for Cruisin' Motors, promises Dot a certain car will give her a "smooth ride." Bram offers a test drive, which Dot declines. She buys the car but soon realizes its suspension is in poor condition. Dot can rescind the contract on the ground of

Accepted Answer

Bram's statement is considered an opinion or "puffing," and since Dot declined the test drive, she cannot claim fraudulent misrepresentation. There's no indication of undue influence by the car maker or a mistake by the buyer that would invalidate the contract.

Question 15

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 contract may be rescinded if the other party (in this case, Quality Built Inc.) knew or should have known of the mistake. This principle protects parties from being unfairly bound by contracts that were entered into under mistaken assumptions that were or should have been apparent to the other party.

Question 16

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

The seller is bound to the deal at the offered price because the offer was accepted by Steak House's manager before any correction was made, creating a binding contract at the accepted terms.

Question 17

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

The correct answer is B) not required to pay due to the bilateral mistake. This is because both parties were unaware of the significant fact that the cattle had died at the time of the contract, which materially affects the agreed-upon exchange. In contract law, a bilateral mistake where both parties are mistaken about a basic assumption on which the contract was made can render the contract voidable.

Question 18

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 court would most likely allow the parties to rescind the contract due to the mutual mistake in the calculation of the contract price, which is a fundamental error affecting the agreement's basis.

Question 19

Ralph enters into a contract with Skye to buy her land based on her assertion that the land is open to development. After the sale, Ralph learns that only a small section of the land can be built on. A local law prohibits construction on the rest of the property. Ralph can

Accepted Answer

The answer of Ralph enters into a contract with Skye...

Question 20

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

This statement is considered an opinion rather than a factual claim, as it is speculative and pertains to future value, which cannot be guaranteed.

Quiz 15: Mistakes Fraud and Voluntary Consent