Chapter 5: Mutual Assent of the Parties

Bob wants to go to Madrid, so he looks online for a good fare. After looking at several options, he finds a reasonably priced one. However, it's nonrefundable; if he purchases it and later needs to change his plans, he will have to pay a $200 penalty fee plus any applicable faire difference. If Bob buys the airfare, he is entering a(n) ___________ with the airline

adhesion contract

Your supervising attorney has asked you to proofread a consumer installment sales agreement she has prepared for her client, the owner of a sporting goods store in Pasadena, Texas. This neighborhood is populated by recent immigrants from Vietnam. You notice that the interest charged on purchases is stated as 98 percent per annum. What possible issue exist? Choose the best answer

all of these answers are correct: typographical error substantive unconscionability math error

In order to prove economic duress, it must be proven that

all of these choices: financial hardship exists wrongful conduct exists an injured party acts against his or her free will

Methods of destroying mutual assent in a contract include which of the following

all of these choices: fraud duress undue influence

A mistake can occur when

all of these choices: one party is wrong about a fact both parties are wrong about a fact

Misrepresentation is defined as:

an innocent misstatement of fact

The contract's "Remedies" clause says it is enforceable only in the courts of Wisconsin. Why might a Wisconsin court refuse to enforce the contract against a consumer

because it expands the department store's rights while diminishing the consumer's

After purchasing his nonrefundable ticket online, Bob receives an e-mail confirmation that says, "Thank you for booking your Madrid, Illinois, flight with Midwest Airlines." He thought he had bought a ticket to Madrid, Spain. He has a voidable contract because of this mistake

false

Fraud and misrepresentation are the only two methods of destroying mutual assent

false

In a duress case, you do not have to prove coercion

false

Ms. Nguyen visits the store's boating department, looking for a kayak. The sales associate shows her a "Air-Boat" kayak, and Mrs. Kim purchases it on an installment plan. When she takes it home, she discovers that it is an inflatable boat. Her best argument for rescission of her contract with the store is substantive unconscionability

false

Undue influence cases are common in which of the following

fiduciary relationships

Match the terms with their definitions

misrepresentation - an innocent misstatement of fact mutual mistake - incorrect understanding of a material fact to a contract by both parties fiduciary - a person in a position of trust let the buyer beware - the doctrine of caveat emptor fraud - a deliberate misstatement of fact unilateral mistake - incorrect understanding of a material fact to a contract by one party unconscionable - a contract that shocks public sensibilities and is oppressive undue influence - wrongful pressure placed upon a vulnerable person in a confidential relationship duress - wrongful pressure placed upon a party depriving him or her of free will

To determine whether mutual assent exists, the court will apply a(n) _______ standard

objective

Oppressive or overly harsh contracts create ___________ contracts

substantive unconscionable

A method of destroying mutual assent is fraud in the contract

true

A sign in the department store's window states "Easy Credit Available" in Vietnamese and English, and the agreement, which is entirely in English, has a contract interest rate of 8 percent per year. A potential problem of procedural unconscionability exists here

true

Adhesion contracts can sometimes be unconscionable

true

Bob is a college graduate. Despite his education, he is unable to understand the fare's terms and conditions because its language is so complex, and the print is so time. These facts will strengthen his argument that the fare contract is an adhesion contract

true

Mutual assent is a meeting of the minds

true

Procedural unconscionability lacks meaningful choice by one party to a contract

true

There are two types of mistakes: mutual and unilateral

true

Undue influence arises out of a confidential relationship

true

If the contract says the store is located in "Pasadena, Texes," will it be enforceable

yes, if mutual assent can be shown