Chapter 11

Matt sells bikes at a local discount store. To encourage Bob to buy a more expensive model than he originally contemplated, Matt tells Bob, "This is the most awesome bike money can buy at this price. You can expect lots of riding pleasure." Based on this statement Bob buys the bike. A week later, before his bike is fully paid for, Bob sees a far superior bike for a lower price at another store. Bob

cannot avoid the contract because the statements were opinions or sales puffing.

Jill contracts to purchase Kevin's automobile under the belief that she can sell it at a profit to Linda, but after Jill has bought the car, she finds out that Linda isn't interested in buying it. Jill:

cannot avoid the contract.

Marcus is a salesman for Outdoor Life. He is telling a potential customer the virtues of a particular tent, by making the claim that "It's tougher than a Baylor bear!" If this customer buys the tent, only to find it destroyed by bears in the campground,

she does not have a valid claim because Marcus' talk was just sales puffery.

Scienter is a legal term which means:

that the seller had knowledge that his statements were false and the statements were made with the intention to deceive.

Fred is a concert violinist who is scheduled to perform at Carnegie Hall for the first time. He buys what he is told is a Stradivarius violin from a well-known, reputable dealer in quality violins, and he pays the going rate for a Stradivarius. He later learns the violin is an imitation, although it is a good imitation, which fooled even the dealer. In this case:

the sale may be rescinded, because the dealer has made a nonfraudulent misrepresentation.

Which of the following would be considered to be a misrepresentation of a material fact for purposes of establishing fraud in the inducement?

"This car has a new radiator."

Which of the following, if any, are requisites for fraud in the inducement? -The representation is justifiably relied on. -False representation of a fact that is material. -Representation is made with knowledge of its falsity and the intention to deceive. -All of these.

All of these.

Which of the following results in a void contract? -Duress by improper threat. -Undue influence on a party. -Duress by physical force. -Fraud in the inducement. -Duress by physical force and also undue influence on a party.

Duress by physical force.

Steven has a typed copy of a contract, which he would like to have Thomas sign. Thomas, who needs glasses to read typing, doesn't want to sign until he has read the document, but Steven convinces Thomas to sign it anyway, because it is a "standard" contract for this type of situation. Is the contract which Thomas signed binding upon him?

Yes, because he was negligent in not ascertaining its contents.

Adam wants to buy a six-passenger car. The salesman tells him that the two-seat sports car Adam sees on the car lot would be just perfect for six people. Adam test drives the car and then buys it.

Adam is not entitled to relief based on fraud because he was not justified in relying upon the salesman's representation that the car would seat six people.

Jim threatens to hit Kai in the head with a baseball bat unless Kai signs a contract agreeing to pay Jim $400 for his computer. Because of the threat, Kai signs the contract.

Jim has committed physical duress against Kai and the contract would be void.

(T/F) Undue influence is the taking of unfair advantage of a person by reason of a dominant position based upon a confidential relationship.

True

Albert found a stone in his yard and took it to Bob, a jeweler, for evaluation. Bob wasn't sure as to the nature of the stone, but told Albert he thought it was a topaz and believed that to be true. Bob then offered to buy the stone for $25 and Albert agreed. Later Albert found out the stone was an uncut diamond worth about $700. The sales contract:

is a valid contract that should be enforced by the law, because neither party knew the exact nature of the stone at the time of the sale.

A contract was made for 125 bales of cotton to arrive on a ship named "Peerless" from Bombay. Unbeknownst to either party to the contract, there were two ships named "Peerless," both of which were sailing from Bombay. One sailed in October and the other in December. The buyer had in mind the ship sailing in October, but the seller had in mind the ship sailing in December. Each party held his belief in good faith. When the goods failed to arrive on time, the buyer sued for breach of contract. The court found:

no contract existed due to mistake in meaning of terms.