Question 1

To sustain a case of fraud in the inducement, the injured party must prove that he actually relied upon the false representation.

Accepted Answer

In order to prove that fraud occurred, the injured party must demonstrate that they actually relied upon the false representation. If they did not rely upon the false representation, then there is no fraud.

Question 2

For a misrepresentation to be actionable as fraud in the inducement, it must be a misrepresentation of opinion.

Accepted Answer

A misrepresentation of fact, not opinion, is actionable as fraud in the inducement.

Question 3

Harry was told that he had to pay $50 for filing his claim in small claims court.He did.If the fee is really $40, he cannot recover the $10 because it is a unilateral mistake of fact.

Accepted Answer

A unilateral mistake of fact occurs when only one party is mistaken about a basic assumption on which they based their decision to enter into a contract. However, if the mistake is due to a misrepresentation by the other party (intentional or not), or if the mistake has a material impact on the fairness of the transaction, the party may have grounds to recover the excess paid or to seek other remedies depending on the jurisdiction and specific circumstances.

Question 4

A voluntary choice of perfectly legitimate alternatives may in some instances constitute economic duress.

Accepted Answer

The answer of A voluntary choice of perfectly legitimate alternatives...

Question 5

Attorney Geraldine advises her client, Rick, to enter a contract, which ultimately would have benefited Geraldine but not Rick.The test of whether the contract, if entered, is voidable based on undue influence is whether Geraldine's advice would have dominated the thinking of an ordinary, reasonable person rather than whether it dominated Rick's mind or emotions.

Accepted Answer

The test for undue influence involves examining whether the advice or actions of one party (in this case, Geraldine) had an improper influence over the other party (Rick) to the extent that it overpowered Rick's will or judgment. It is specific to the affected individual's (Rick's) state of mind and circumstances, not based on an ordinary, reasonable person's perspective.

Question 6

Physical compulsion and improper threats are the two basic types of duress.

Accepted Answer

This is correct, physical compulsion involves actual physical force or violence while improper threats involve the use of fear or coercion to force someone to do something against their will.

Question 7

Economic coercion that compels a person to enter into a contract renders that contract void.

Accepted Answer

The answer of Economic coercion that compels a person to...

Question 8

A famous decision involving mistake in the meaning of contractual terms is Raffles v.Wichelhaus , a case involving two ships with the same name which were confused by the two parties.Neither party was at fault, and the court held that no contract existed.

Accepted Answer

This statement is true. In Raffles v. Wichelhaus, both parties had agreed to the sale of cotton to be shipped on a ship called "Peerless." However, there were two ships with the same name, and each party had meant a different ship. The court held that there was no contract because there was no agreement on the specific ship to be used for the shipment.

Question 9

An act that is not wrongful or unfair may constitute duress.

Accepted Answer

Duress involves coercion or compulsion; an act that is not wrongful or unfair typically does not exert the kind of pressure or threat necessary to constitute duress.

Question 10

Undue influence is the taking of unfair advantage of a person by reason of a dominant position based upon a confidential relationship.

Accepted Answer

Undue influence is a legal term that refers to the taking of unfair advantage of a person by reason of a dominant position based upon a confidential relationship. This can include situations where a person in a position of power or authority, such as a caregiver or family member, uses that relationship to exert control over another person's decisions or actions. It is generally considered to be unethical and can sometimes be grounds for legal action.

Question 11

Fraud in the inducement will render an agreement void.

Accepted Answer

Fraud in the inducement renders an agreement voidable at the option of the party who was misled, not automatically void.

Question 12

At the marriage of her daughter, Lorna is given papers to sign, which the catering company says are the invoices for the food, service, and decorations.Underneath the invoices are a carbon and a contract of sale for a portion of the failing catering business.Lorna signs the papers; her signature is transferred to the sales contract.This is a void contract because it was entered by fraud in the execution.

Accepted Answer

This contract is void because Lorna was deceived about the nature of the document she was signing, which constitutes fraud in the execution, rendering the contract invalid from the start.

Question 13

Ty threatened to have Lisa's father prosecuted for embezzlement unless Lisa signed a contract to pay Ty 12 monthly payments of $500 each to purchase his car.Lisa cannot avoid the contract based on duress since the threat was toward Lisa's father rather than Lisa herself.

Accepted Answer

Duress can invalidate a contract if the consent to the contract was induced by an improper threat by the other party that leaves the victim with no reasonable alternative, which can include threats made against the victim's family members, not just the individual themselves.

Question 14

The law requires that to form a valid contract the agreement must be voluntary and knowing.

Accepted Answer

The requirement of voluntary and knowing agreement is one of the essential elements of a valid contract under the law of contracts.

Question 15

In the case of Rea v.Paulson , the court found no undue influence because the party in the dominant position had insisted that the weaker party seek independent advice about deeding her house.

Accepted Answer

The answer of In the case of Rea v.Paulson ,...

Question 16

Pat told her friends that her car got 35 miles to the gallon in the city when in reality it only got 20 miles per gallon.When Pat decides to sell and one these friends decides to buy the car, Pat is under no duty to tell the correct figure unless asked.

Accepted Answer

It is a fraudulent misrepresentation to knowingly provide false information to a potential buyer in order to deceive them into purchasing the car. Pat has a duty to disclose the correct information, even if not asked directly.

Question 17

Matt sells bikes at a local discount store.To encourage Bob to buy a more expensive model than he originally contemplated, Matt tells Bob, "This is the most awesome bike money can buy at this price.You can expect lots of riding pleasure." Based on this statement Bob buys the bike.A week later, before his bike is fully paid for, Bob sees a far superior bike for a lower price at another store.Bob can avoid his contract with Matt because of fraudulent misrepresentation.

Accepted Answer

Matt's statement is considered puffery, which is an opinion or exaggeration made by a salesperson or found in an advertisement that is not intended to be a factual warranty of the product's performance. It does not constitute fraudulent misrepresentation.

Question 18

Marjorie has been cared for by her family physician for 35 years.She decides to assume the mortgage on his new clinic.The contract is automatically invalid because of undue influence.

Accepted Answer

There is not enough information provided to determine whether the contract is automatically invalid due to undue influence. The length of time Marjorie has been cared for by her family physician is unrelated to the validity of the contract. The validity of the contract would depend on the specific circumstances of the transaction and whether there was any evidence of coercion or manipulation that would constitute undue influence.

Question 19

Acts constituting duress are necessarily crimes or torts in themselves.

Accepted Answer

Acts constituting duress can be lawful or unlawful, and do not necessarily constitute crimes or torts in themselves. For example, a business may threaten to terminate a contract with a supplier if they do not agree to lower their prices, which may be a lawful act of duress in a commercial context.

Question 20

Hal holds a gun to Irving's head and tells him to sign the contract.Irving signs the contract, because he fears for his personal safety.The contract is void, because it was entered into under duress.

Accepted Answer

A contract entered into under duress, such as the threat of physical harm, is not considered valid because one party did not willingly consent to the terms.

Quiz 11: Conduct Invalidating Assent