Question 1

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
A) not avoid the contract because persons are assumed to know the law.
B) avoid the contract due to a bilateral mistake.
C) avoid the contract due to undue influence.
D) avoid the contract due to fraud.

Accepted Answer

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

Question 2

Ken, a real estate agent, assures Lily that a certain parcel of commercial property fronts on the most highly trafficked street in Metro City. Lily buys the property and then discovers that the street has no more traffic than any other in its vicinity. Lily is most likely a victim of
A) duress.
B) fraudulent misrepresentation.
C) mistake.
D) opinion.

Accepted Answer

Lily is a victim of fraudulent misrepresentation because Ken made a false statement about the property's location to induce her to buy it.

Question 3

Fact Pattern 13-4 In selling a warehouse, Riley tells Sam that he knows that the property has a certain capacity, making it suitable for a nightclub. Riley knows nothing about the capacity of the building, but it is not as he specifies. Sam buys the building.
Refer to Fact Pattern 13-4. Riley's knowledge that facts were falsely represented to Sam is known as
A) unilateral mistake.
B) misrepresentation by silence .
C) scienter.
D) none of these.

Accepted Answer

Scienter refers to the knowledge of the falsehood of a representation, indicating an intent to deceive. Riley's statement about the capacity, knowing he has no basis for it, demonstrates scienter.

Question 4

Bram, a salesperson for Cruisin' Motors, promises Deb a certain car will give her a "smooth ride." Bram offers a test drive, which Deb declines. She buys the car but soon realizes its suspension is in poor condition. Deb can rescind the contract on the ground of
A) fraudulent misrepresentation.
B) undue influence.
C) mistake.
D) none of the choices.

Accepted Answer

The answer of Bram, a salesperson for Cruisin' Motors, promises...

Question 5

Fact Pattern 13 - 2 Owen, an employee of Plumbing & Pipes LLC, makes a substantial mathematical mistake in totaling the estimated costs for a project for which Quality Construction Inc. is seeking bids. Consequently, Plumbing & Pipes' bid is significantly low.
Refer to Fact Pattern 13-2. The contract with Quality Construction that includes the mistake may be rescinded if the mistake was
A) made inadvertently and without gross negligence.
B) intentional.
C) made with gross negligence.
D) unilateral.

Accepted Answer

If the mistake was made inadvertently and without gross negligence, the contract may be rescinded because it was an honest mistake that significantly affects the terms of the agreement.

Question 6

Dix agrees to sell Eli, for $1,500, a remote parcel of land. Soon after, the land becomes much more valuable due to the construction of a new highway nearby. A court would
A) not rescind the contract .
B) rescind the contract on the basis of fraud.
C) rescind the contract on the basis of mistake.
D) rescind the contract on the basis of undue influence.

Accepted Answer

The court would not rescind the contract because the increase in land value due to external factors like the construction of a highway does not constitute grounds for rescission based on fraud, mistake, or undue influence. The contract was agreed upon with the knowledge available at the time, and changes in value due to market conditions do not affect the validity of the contract.

Question 7

Car Lot's salesperson Dick offers to sell Ernie, who is twenty years old, a car. Dick intentionally misrepresents the vehicle's use and repairs. In reliance, Ernie buys the car. To prove fraud, Ernie does not have to show that
A) Dick intentionally deceived Ernie.
B) Dick misrepresented material facts.
C) Ernie is under twenty-one.
D) Ernie justifiably relied on Dick's misrepresentations.

Accepted Answer

Ernie's age is not relevant to proving fraud. The other three options are essential elements in proving fraud.

Question 8

Alan induces Beth to enter into a contract for the purchase of a Chef's Burger House restaurant. Alan 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
A) fraudulent misrepresentation.
B) undue influence.
C) mistake.
D) duress.

Accepted Answer

The answer of Alan induces Beth to enter into a...

Question 9

In selling a 300-acre farm to Organic Farms, Peyton tells the buyer that the land "will be worth a whole lot more in the future." This is
A) duress.
B) fraudulent misrepresentation.
C) mistake.
D) opinion.

Accepted Answer

Peyton's statement is an opinion about the future value of the land, not a factual assertion, and thus does not constitute fraudulent misrepresentation.

Question 10

Fact Pattern 13 - 2 Owen, an employee of Plumbing & Pipes LLC, makes a substantial mathematical mistake in totaling the estimated costs for a project for which Quality Construction Inc. is seeking bids. Consequently, Plumbing & Pipes' bid is significantly low.
Refer to Fact Pattern 13-2. Any contract with Quality Construction that includes the mistake may be rescinded
A) if Quality Construction knew or should have known of the mistake.
B) if Owen's supervisor did not know of the mistake.
C) if Plumbing & Pipes knew or should have known of the mistake.
D) under no circumstances .

Accepted Answer

If Quality Construction knew or should have known of the mistake, the contract may be rescinded due to the principle of unilateral mistake, where one party is aware of the other's error.

Question 11

Fact Pattern 13 - 2 Owen, an employee of Plumbing & Pipes LLC, makes a substantial mathematical mistake in totaling the estimated costs for a project for which Quality Construction Inc. is seeking bids. Consequently, Plumbing & Pipes' bid is significantly low.
Refer to Fact Pattern 13-2. The contract with Quality Construction that includes the mistake may be rescinded
A) if the mistake involves a material fact.
B) if the mistake involves any fact.
C) if the mistake is one of value or quality.
D) under no circumstances.

Accepted Answer

A contract may be rescinded if a mistake involves a material fact, as it affects the essence of the agreement.

Question 12

Fact Pattern 13 - 3 County Title Company processes information furnished by others to transfer title to real estate from a seller to a buyer. In performing this task for a sale of land from Dale to Ezra, the furnished information is mistaken.
Refer to Fact Pattern 13 - 3. The contract between Dale and Ezra that includes the mistake may be rescinded if the mistake concerns
A) a fact that is important and central to the contract.
B) a term in the contract subject to only one reasonable interpretation.
C) a detail on which the parties had a true "meeting of the minds."
D) a third party, such as County Title.

Accepted Answer

A contract may be rescinded if there is a mutual mistake concerning a fact that is important and central to the contract, as it affects the very basis of the agreement.

Question 13

Gary owns two all-terrain vehicles (ATVs), worth $1,000 and $500, respec-tively. Helen enters into a contract to buy "Gary's ATV" for $750. Gary believes, in good faith, that he is selling the $500 ATV. Helen believes, in good faith, that she is buying the $1,000 ATV. In this situation
A) Gary is entitled to $750 for the $500 ATV.
B) Helen is entitled to the $1,000 ATV for $750.
C) Helen must buy both ATVs for $1,500.
D) the contract is not enforceable.

Accepted Answer

This situation involves a mutual mistake, where both parties entered the contract with different beliefs about the subject matter. Since the mistake was mutual, the contract is not enforceable. Neither party can force the other to sell or buy the ATV.

Question 14

Honi, 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
A) mistake of law.
B) undue influence.
C) mistake of fact.
D) none of these.

Accepted Answer

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

Question 15

Dennis sells a motorcycle to Elton without disclosing that the odometer, which reads 10,000 miles, was disconnected 100,000 miles ago. Dennis is most likely liable for
A) fraudulent misrepresentation.
B) undue influence.
C) mistake.
D) duress.

Accepted Answer

Dennis is likely liable for fraudulent misrepresentation because he knowingly failed to disclose a material fact about the motorcycle's mileage, intending to deceive Elton.

Question 16

Berry enters into a contract with Clyde for a guided tour of Deep Canyon. Clyde represents that he is an experienced, knowledgeable guide, when in reality he has never been in the canyon. Berry is most likely a victim of
A) duress.
B) fraudulent misrepresentation.
C) mistake.
D) opinion.

Accepted Answer

Berry is a victim of fraudulent misrepresentation because Clyde falsely represented his qualifications and experience to induce Berry into the contract.

Question 17

Flora enters into a contract with Global Shipping, Ltd., to insure and ship a painting from France 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
A) award allow the parties to rescind the contract.
B) damages to Flora for the mistake.
C) award damages to Global for the mistake.
D) enforce the contract as is.

Accepted Answer

A court would likely allow the parties to rescind the contract due to the mistake, as it was a mutual mistake regarding a material fact (the contract price), which significantly affects the agreed terms.

Question 18

Fact Pattern 13 - 3 County Title Company processes information furnished by others to transfer title to real estate from a seller to a buyer. In performing this task for a sale of land from Dale to Ezra, the furnished information is mistaken.
Refer to Fact Pattern 13-3. The contract between Dale and Ezra that includes the mistake may be rescinded if the mistake involves
A) a material fact.
B) any fact.
C) value.
D) quality.

Accepted Answer

A contract may be rescinded if there is a mutual mistake involving a material fact, as it affects the essence of the agreement.

Question 19

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
A) entitled to recover the value of the lost cattle.
B) not required to pay due to the bilateral mistake.
C) not required to pay due to the unilateral mistake.
D) required to pay because he assumed the risk the cattle might die.

Accepted Answer

Both parties were unaware of the storm and the loss of cattle, which means that there was a mutual mistake regarding the subject matter of the contract. Under the principles of bilateral mistake, the parties may rescind the contract. David is not required to pay due to this mutual mistake.

Question 20

Fact Pattern 13 - 3 County Title Company processes information furnished by others to transfer title to real estate from a seller to a buyer. In performing this task for a sale of land from Dale to Ezra, the furnished information is mistaken.
Refer to Fact Pattern 13 - 3. If Dale and Ezra are both ignorant of the mistake, it is
A) a bilateral mistake.
B) a fraudulent misrepresentation.
C) a unilateral mistake.
D) undue influence.

Accepted Answer

A bilateral mistake occurs when both parties are mistaken about a fundamental fact in the contract. In this case, both Dale and Ezra are unaware of the mistake, making it a bilateral mistake.

Quiz 13: Voluntary Consent

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

Ken, a real estate agent, assures Lily that a certain parcel of commercial property fronts on the most highly trafficked street in Metro City. Lily buys the property and then discovers that the street has no more traffic than any other in its vicinity. Lily is most likely a victim of

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

Dix agrees to sell Eli, for $1,500, a remote parcel of land. Soon after, the land becomes much more valuable due to the construction of a new highway nearby. A court would

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

Alan induces Beth to enter into a contract for the purchase of a Chef's Burger House restaurant. Alan 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

In selling a 300-acre farm to Organic Farms, Peyton tells the buyer that the land "will be worth a whole lot more in the future." This is

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

Honi, 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

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

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

Flora enters into a contract with Global Shipping, Ltd., to insure and ship a painting from France 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

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