Business Law Ch. 7 Review

A confidential relationship between parties to the contract must always be shown to prove undue influence.

F

Rescission is conduct suggesting you intend to be bound by the contract.

F

Signing a contract written in technical terminology that you don't understand will not bind you.

F

Unilateral mistakes create the right to rescind or void the contract.

F

All persons are presumed to know the law.

T

Committing an act of violence to obtain a signature on a written contract is duress.

T

Contracts created or modified by duress are rescindable.

T

In some states, the contract is still valid if the mutual mistake is about the applicable law.

T

Material facts are important facts that influence the parties' decisions about a contract.

T

Misrepresentation is an element in both innocent misrepresentation and fraud.

T

Punitive damages are a form of punishment.

T

The absence of genuine assent will make the contract voidable.

T

Unilateral mistakes of law generally leave the resultant contract valid.

T

When one party to the contract is in a position of trust and wrongfully dominates the other party, undue influence occurs.

T

A statement of opinion by an expert ____ be treated as fact. a. will b. will not

a

Contracts entered into as a result of misrepresentation or fraud are voidable by a. the injured party b. the UCC c. both a and b d. none of these

a

Key elements in undue influence are unfair persuasion and a. relationship b. ownership c. both a and b d. none of these

a

In misrepresentation, the statement must be one of a. slander b. fact c. opinion d. unimportant information

b

In order to be effective, a rescission must be a. ratified b. prompt c. agreed upon d. none of these

b

Which type of mistake may give both parties the right to rescind? a. unilateral mistake of law b. bilateral mistake of law c. mutual mistake of fact d. mutual mistake of law

b

A mistake from failure to read a contract before signing is called a. a fraudulent mistake b. a mutual mistake c. a unilateral mistake d. none of these

c

Disclosure is required when a statement a. omits important information about a material fact b. is made false by subsequent c. both a and b d. none of these

c

Generally, mistakes that have no effect upon the contract rights of the parties are a. fraudulent mistakes b. mutual mistakes c. unilateral mistakes d. none of these

c

In economic duress cases, the courts look at a. both the threat and the size of the threatened party b. both the threat and the place where the threat occurred c. both the threat and the alternatives available to the threatened party d. none of these

c

A genuine agreement may be lacking due to a. duress b. fraud. c. undue influence d. all of these

d

An untrue statement is not material if a. the statement would cause a reasonable person to contract b. the defendant knew this plaintiff would rely on the statement c. the defendant knew the statement was false d. the statement was an honest opinion

d

Which of the following is a threat that can create duress? a. threat to shoot the contracting party if she doesn't sign the contract b. threat to sue (without grounds) the contracting party is she doesn't modify the contract c. threat to report the contracting party to the IRS for tax evasion if she doesn't sign the agreement d. all of the above

d

Which of the following need not be done by the dominating party to prevent a claim of undue influence? a. act with total honest b. fully disclose all important facts c. insist the weaker party seek independent legal advice before contracting d. submit the contract to a judge for review

d