Question 1

Fraudulent misrepresentation is intentionally misleading another person into a contract.

Accepted Answer

Fraudulent misrepresentation is a type of misrepresentation where the misrepresentation is made intentionally or recklessly, with the knowledge that it is false or without caring whether it is true or false, and it is made to deceive another person into entering into a contract.

Question 2

The victim of intentional misrepresentation can sue for damages but cannot ask for rescission.

Accepted Answer

The victim of intentional misrepresentation can sue for damages and also has the right to ask for rescission of the contract, which means canceling the contract as if it never existed, to restore the parties to their positions before the contract was made.

Question 3

Non est factum is available as a defence even when there is negligence on the part of the person claiming it.

Accepted Answer

Non est factum is a defense used when a person signs a document without understanding its nature due to a fundamental mistake. However, it generally cannot be invoked if the person's own negligence contributed to the mistake.

Question 4

The remedy of rescission is not available if the parties cannot be returned to their original positions because the subject matter of the contract has been destroyed or damaged.

Accepted Answer

Rescission is a remedy that aims to put the parties in the same position they were in before the contract was formed. If the subject matter of the contract has been destroyed or damaged, it may not be possible to return the parties to their original positions, thus making rescission unavailable as a remedy.

Question 5

When there is clear evidence that both parties agreed to something different than what was in the written document,the courts will rectify the document.

Accepted Answer

This is known as rectification of a contract and is a remedy available to parties when there is a mistake in the written document that does not accurately reflect what both parties had actually agreed upon. The court can rectify the document to reflect the true agreement of the parties.

Question 6

Misunderstanding occurs when each party has a different understanding of the terms of the agreement,in which case the courts apply a reasonable interpretation of the contract.

Accepted Answer

When there is a misunderstanding in the terms of an agreement, the courts will interpret the contract based on what is deemed reasonable.

Question 7

Rules of interpretation are guidelines used by the court to correct simple misunderstandings in relation to the contract.

Accepted Answer

Rules of interpretation, also known as canons of construction, are used by the court to determine the meaning of words or phrases in a contract. They are meant to clarify or correct potential misunderstandings and ensure that the contract is interpreted according to its intended meaning.

Question 8

The court will not allow the careless party to escape responsibility when a shared mistake is the result of the negligence of one of the parties.

Accepted Answer

The court will hold the negligent party responsible for a shared mistake.

Question 9

According to Braut v.Stec,what is the Court's position when one enters into a contract where a claim is made that a bargain is unconscionable?

Accepted Answer

According to Braut v. Stec, a presumption of fraud is raised when there is an inequality in the position of the parties due to the ignorance of the weaker party. This means that if one party lacks sufficient knowledge or bargaining power to protect their interests in the contract, the court may find that the contract is unconscionable and unenforceable.

Question 10

Victims of misrepresentation who have affirmed the contract are bound by the affirmation and cannot later insist on ______________.

Accepted Answer

Affirmation of the contract means that the victim of misrepresentation has accepted the contract as valid and is not seeking to terminate it. Therefore, they cannot later insist on rescission, which is the right to terminate the contract due to a misrepresentation.

Question 11

The victim of fraudulent misrepresentation retains the right to have the parties to the contract returned to their original positions but not to be reimbursed for any out-of-pocket expenses.

Accepted Answer

The victim of fraudulent misrepresentation can be reimbursed for out-of-pocket expenses as part of the remedy for the misrepresentation. The victim can seek to rescind the contract and be returned to their original position, or they may be able to elect to keep the contract and seek damages instead.

Question 12

___________ is a false statement of fact that persuades someone to enter into a contract.

Accepted Answer

Misrepresentation is a false statement of fact that persuades someone to enter into a contract. Undue influence refers to using one's position of power to pressure someone into a contract, mistake refers to a misunderstanding of a fact or law, duress refers to using threats or force to compel someone to enter into a contract, and avoidance refers to the act of canceling or rescinding a contract.

Question 13

____________ attempts to return both parties to their original positions; the subject matter of the contract must be returned to the original owner,and any monies paid under the contract must also be returned.

Accepted Answer

Rescission is the appropriate choice as it refers to the cancellation of a contract and attempts to return both parties to their original positions by returning the subject matter of the contract to the original owner and any monies paid under the contract. Damages and compensation refer to monetary awards paid to the aggrieved party, whereas avoidance and remedies are broader terms that include various legal actions including rescission.

Question 14

The major problem with _____________ is the need to establish that the person being sued knowingly misled the victim.

Accepted Answer

The major problem with fraudulent misrepresentation is the need to establish that the person being sued knowingly misled the victim. This requires proving the defendant's intent to deceive, which can be difficult to establish.

Question 15

The purpose of contract law is to give effect to the reasonable expectations of the parties to an agreement.

Accepted Answer

Contract law aims to uphold the intentions and agreements made by the parties involved in a contract. This includes giving effect to their reasonable expectations, which are taken into account when determining the terms and conditions of the agreement.

Question 16

A victim of fraud cannot seek damages where rescission is not available.

Accepted Answer

A victim of fraud may still be able to seek damages even if rescission is not available, such as in instances where the contract cannot be undone or where the fraud was not discovered until after the contract was performed.

Question 17

The threat of violence makes a contract voidable.

Accepted Answer

This is because the presence of threat or coercion undermines the voluntary consent required for a contract to be considered enforceable. If one party is forced or coerced into entering into a contract, they have the right to void the contract.

Question 18

If the person making the misrepresentation is in no way at fault,the misrepresentation is innocent,and the remedies are limited.

Accepted Answer

If the misrepresentation is innocent, it means that the person making the misrepresentation had no intention to deceive or mislead the other party. In such a case, the remedies available may be limited as the person making the misrepresentation cannot be held entirely responsible for the consequences. However, the innocent misrepresentation can still lead to a breach of contract and may result in damages or rescission of the contract.

Question 19

The victim of ________ can seek monetary compensation as well as rescission for any loss incurred.

Accepted Answer

The victim of fraudulent misrepresentation can seek monetary compensation as well as rescission for any loss incurred. This is because fraudulent misrepresentation involves intentional deceit or manipulation by one party, which can lead to significant harm or loss for the other party. Innocent misrepresentation and negligent misrepresentation may result in compensatory damages, but not necessarily rescission. Misrepresentation and deceit are broader terms that can encompass any type of false or misleading statement, but do not necessarily involve the same level of intent or harm as fraudulent misrepresentation.

Question 20

In Rochdale Credit Union v.Barney,a lawyer persuaded his client to guarantee a loan.The relationship of solicitor/client leads to a presumption of

Accepted Answer

The relationship between the lawyer and client can create a situation of undue influence, where the client may be pressured into making a decision that they would not have made otherwise. As such, there is a presumption of undue influence in such situations. The other options (duress, mental incapacity, lack of intention, and unconscionability) do not necessarily apply in this scenario.

Quiz 8: Factors Affecting the Contractual Relationship