Deck 10: Real Assent

Question 1

A unilateral mistake of fact is usually grounds for avoiding a contract.

Answer 1

True

Question 2

Vladimir sells Cosmos a 1958 Chevrolet for $1200. Cosmos knows, but Vladimir does not, that this automobile is a rare collector's item worth at least $12,000. Cosmos is liable for misrepresentation.

Answer 2

False

Question 3

In duress by threat, _____.

A) the threat must be proper
B) there must be a reasonable alternative
C) the test for inducement is objective
D) the contract is rendered voidable
E) the test for inducement is based on what a more reasonable person might have feared

Answer 3

D

Question 4

Seller represents to Buyer that "the basement of this house is dry," and it was when Seller said that. But three months later the foundation settles and the basement becomes very damp. Seller has an obligation to disabused Seller of the now incorrect information..

Question 5

A contract induced by improper threats or undue influence is void.

Question 6

In the case of mutual mistake, relief may be granted if the mistake concerns a basic assumption on which the contract was made.

Question 7

Fraud in the execution involves some misrepresentation about the subject of the contract that stimulates assent.

Question 8

John, age 16, bought a hot car from Seller; John smashed up the car. The majority rule is that he may disaffirm, but his recovery will be limited to the depreciated value of the car.

Question 9

If the misrepresentation is fraudulent, the victim can avoid the contract, no matter the significance of the misrepresentation.

Question 10

A fraudulent misrepresentation can be based on statements of fact, opinion, predictions about the future, or a representation of law.

Question 11

If the tort suit is an indirect method for enforcing a contract, infants are liable for their torts.

Question 12

Which of the following is true about undue influence?

A) It is a harsher form of duress.
B) The unfairness does not lie in any misrepresentation.
C) Usually the fact pattern involves the victim receiving advice from most people except the persuader.
D) A contract made under undue influence stands void.
E) The perpetrator threatens the victim to assent to the contract.

Question 13

Which of the following is true with regard to misrepresentation?

A) Fraud in the execution is defined as some misrepresentation about the subject of the contract.
B) Fraud in the inducement is defined as a misrepresentation as to the character of the contract.
C) If a misrepresentation is intentional, it is non-fraudulent.
D) If a misrepresentation is unintentional, it is fraudulent.
E) A non-fraudulent misrepresentation can be innocent.

Question 14

Identify the correct statement in proving fraudulent misrepresentation.

A) Concealment is a more passive type of nondisclosure.
B) Nondisclosure of a fact operates as a misrepresentation under all circumstances.
C) The act of concealment should be direct.
D) Concealment may consist of diverting the other party from gaining the necessary knowledge.
E) Sales puffery is considered a fact.

Question 15

A contract made by a person under guardianship is voidable.

Question 16

Fraud in the inducement makes the agreement void.

Question 17

A person who was intoxicated at the time he made a contract cannot subsequently ratify it.

Question 18

A defendant can win a case by solely demonstrating that the plaintiff would have assented to the contract even without the misrepresentation.

Question 19

An infant will lose the power to avoid a contract if the rights of third parties intervene.

Question 20

Nonfraudulent misrepresentation does not involve scienter.

Question 21

What are the requirements for a real assent? What are the various remedies available in case an agreement is not made under real assent?

Question 22

In Konic International Corporation, v. Spokane Computer Services, Inc., which of the following led to the final decision by the court?

A) There was a mistake on part of Young who did not have the authority to order the equipment.
B) The contract was made intentionally misrepresenting the facts.
C) The mistake was mutual, relating to a failure of communication.
D) There was a misstatement of fact by Konic.
E) There was a fraudulent misrepresentation.

Question 23

Which of the following is true about persons who are mentally ill?

A) A contract made by a person who is mentally ill is still non-voidable by the person after regaining sanity.
B) If a guardian has been legally appointed for a mentally ill person, any contract made by the latter is valid and can be ratified by the ward.
C) If a contract is for a necessity, the other party to the contract cannot claim against the estate of the one who is mentally ill.
D) In a contract for necessity, if the contract is fair and the other party has no knowledge of the mental illness, the court does not have the power to order relief.
E) In a contract for necessity, only if a mental illness impairs the competence of the person in the particular transaction can the contract be avoided.

Question 24

A(n) _____ is one that would be likely to induce a reasonable person to manifest his assent.

A) innocent misrepresentation
B) rescission
C) duress
D) misstatement of fact
E) material misrepresentation

Question 25

What was the reason that led to the final decision by the court in the Hodge v. Shea case?

A) The consideration offered by Dr. Hodge did not require an actual detriment.
B) Dr. Hodge promised a benefit to which he had a pre-existing obligation.
C) Dr. Hodge acted in haste in an effort to fortify what he must have realized was a dubious contract.
D) Since Mr. Shea was not infirm to the point of incompetency to contract, the manifesting assent was binding.
E) Mr. Shea's assent to the contract, without notice to Mr. Ransdell and under deliberate enticement, was not the product of an exercise of an informed judgment.

Question 26

Which of the following is true of fraudulent misrepresentation?

A) A fraudulent misrepresentation is never a crime.
B) Fraudulent misrepresentation is a misstatement of facts that is unintentionally made and justifiably relied upon.
C) If a statement of fact is made false by later events, it must be disclosed as false.
D) A half-truth cannot amount to misrepresentation.
E) A typist's unnoticed error in a letter cannot amount to misrepresentation.

Question 27

On May 1^st Dubious sold Rodney Thermal (Hot Rod), who was two weeks shy of his 18^th birthday, a 2003 Bulgemobile Turboturgid Mark VI automobile for $9,000. Hot Rod made a down payment, and agreed to pay $250 per month on the balance. When Hot Rod applied for insurance with Goodhands Insurance Co. he signed a "Notice of Rejection," declining to purchase uninsured motorist coverage (which was not required in the jurisdiction). One week later an uninsured motorist crashed into the car; Hot Rod sought to disaffirm his rejection of the insurance on the basis of his infancy. Four weeks later-having made one payment-he sought to disaffirm his purchase of the car entirely.
a. May Hot Rod disaffirm his rejection of the insurance as he wants to?
b. May he disaffirm the contract entirely?
a) No, Hot Rod cannot disaffirm his rejection of the contract. An infant may avoid his or her contract, but the rule is not that the infant may avoid or disaffirm the rejection of a contract.
b) No, Hot Rod cannot disaffirm the contract entirely. After reaching majority, an infant has a reasonable time to disaffirm contracts made during infancy, but if the infant performs a part of the contract after reaching majority, the contract is said to be ratified by the infant and it cannot be avoided.

Question 28

In proving fraud, which of the following is true in case of reliance by the victim?

A) The reliance need not be solely on the false assertion.
B) The defendant can win a case by demonstrating that the plaintiff would have assented to the contract even without misrepresentation.
C) If the victim fails to read documents which give him the true facts, he can complain that he relied on contrary statements.
D) The rule of reliance applies to statements about the occurrence of events in the past, present, and future.
E) If the statement is one that concerns matters peculiarly within the person's purview, he would be held to have justifiably relied on the other party's false assertion.

Question 29

With reference to assertions of intention, which of the following is NOT true?

A) Usually, assertions of intention are not considered facts.
B) The right to misstate intentions is useful chiefly in the acquisition of business.
C) To be a misrepresentation that will permit rescission, an assertion of intention must be false at the time made.
D) To render a contract voidable, the false assertion of intention must be harmful in some way to other interests of the recipient.
E) The law allows considerable leeway in the honesty of assertions of intention.

Question 30

In a contract with an infant, _____.

A) eighteen-year-olds may assent to binding contracts
B) if the contract has been executed, the infant would be relieved from facing more arduous consequences
C) if the contract is executory, the infant will be liable under a quasi-contract
D) the infant will lose his power to accept the contract if the rights of third parties intervene
E) if a tort suit is an indirect method of enforcing a contract, infants will not be held liable for their torts

Question 31

Dubious sold Pauline an owner's manual for a 1955 Bulgemobile Mark II sedan-quite a rare bit of automobilia (collectable automobile stuff) for $85, which he told her was "new." Unknown to either Dubious or Pauline, the manual was in fact used: Pauline found underlining, small cookie crumbs, and grease spots on two pages in the middle of the book.
May Pauline avoid the contract of sale for the owner's manual?

Question 32

Dubious had no experience with "petrolenia" (the hobby of collecting old-fashioned gasoline pumps, oil cans, gas-station equipment, tools, vending machines, and supplies--an off-shoot of the old-car hobby) but he contracted to purchase for $8000 a 1930s-era Sun Oil gasoline pump from Seller. Two weeks later, Dubious and Seller met with a state Soil Conservation inspector to discuss the condition of the in-ground gas tank Dubious wanted to use. Seller said to the inspector, in Dubious' presence, "The pump pushes a good 10 gallons a minute; it's sure worth $8 grand." The underground tank was approved; Dubious installed the pump, but it only pumped about 1 gallon a minute (uselessly slow), and therefore its value was only about $1000 as a conversation piece.
When the pump proved useless for practical purposes, Dubious sued Seller for rescission of the contract. May Dubious avoid the contract?

Question 33

Which of the following led to the final decision by the court in the Vokes v. Arthur Murray, Inc. case?

A) The contract did not develop Vokes' dancing abilities.
B) The contract did not develop Vokes' dance aptitude.
C) The contract led to Vokes having difficulty in hearing the musical beat.
D) There was an assertion of intentions.
E) The contract was a misrepresentation of assertion of opinion.