Chapter 14 BLaw

Car Lot's salesperson Dirk offers to sell Espy, who is twenty years old, a car. Dirk intentionally misrepresents the vehicle's use and repairs. In reliance, Espy buys the car. To prove fraud, Espy does not have to show that a. Espy justifiably relied on Dirk's misrepresentation. b. Dirk intentionally deceived Espy. c. Espy is under twenty-one. d. Dirk misrepresented material facts

Espy is under twenty-one

A contract that includes a bilateral mistake may be rescinded if the mistake involves a. an opinion. b. any fact. c. none of the choices. d. a material fact

a material fact

Data Inc. offers to provide certain services to Enterprise LLC, but mistakenly transposes some of the digits in the price so that $15,400 appears in the offer as $14,500. Enterprise accepts the written offer. Enterprise's best argument in favor of enforcement of the contract is a. a mistake of value does not afford relief from a contract. b. a bilateral mistake does not afford relief from a contract. c. the price was below the prices of comparable services. d. a unilateral mistake does not afford relief from a contract

a unilateral mistake does not afford relief from a contract

Fra enters into a contract with Global Shipping Ltd. to insure and ship a painting from Holland to the United States for a certain price. Global makes a mistake in adding the costs, which results in a contract price that is $1,000 less than the true cost. Most likely, a court would a. award damages to Fra for the mistake. b. allow the parties to rescind the contract. c. enforce the contract as is. d. award damages to Global for the mistake

allow the parties to rescind the contract

In selling a 300-acre tract to Organic Farm, Peyton tells the buyer that the land "will be worth twice as much by next year." This statement is not likely to support rescission of the contract because it is a. a material fact. b. an opinion. c. a mistake. d. a misrepresentation.

an opinion

Alvin induces Beth to enter into a contract for the purchase of a Chef's Burger restaurant. Alvin knowingly misrepresents a number of material features about the restaurant and the business. When Beth discovers the truth, she can rescind the contract on the basis of a. none of the choices. b. undue influence. c. fraudulent misrepresentation. d. mistake.

fraudulent misrepresentation

Denis sells a motorcycle to Elton without disclosing that the odometer, which reads 10,000 miles, was disconnected 100,000 miles ago. Denis is most likely liable for a. none of the choices. b. puffery. c. fraudulent misrepresentation. d. mistake.

fraudulent misrepresentation

Fess convinces Gwyn to enter into a contract for the purchase of a Falafel Waffle Food Cart by knowingly misrepresenting a number of material features about the facility and the business. Most likely, Gwyn can rescind the contract on the basis of a. negligent misrepresentation. b. innocent misrepresentation. c. fraudulent misrepresentation. d. none of the choices

fraudulent misrepresentation

Hua applies to Inventory Corporation for a position as a coder. Hua has no training in coding. After Hua is hired, Inventory learns the truth. The employer can rescind the contract on the basis of a. mistake. b. fraudulent misrepresentation. c. none of the choices. d. undue influence

fraudulent misrepresentation

Luc, a vehicle dealer, offers to sell Mel a truck and trailer, which Luc claims can haul a certain weight. He knows nothing about the capability of the truck, but it is not as he asserts. Mel buys the truck. On learning the truth, Mel confronts Luc, who says he was not trying to fool Mel—he was only trying to make a sale. This is a. a valid defense to a charge of fraud. b. fraudulent misrepresentation. c. a mistake of value. d. puffery.

fraudulent misrepresentation

Orin, an employee of Plumbing LLC, makes a substantial mathematical mistake in totaling the estimated costs for a project for which Quality Built Inc. is seeking bids. Consequently, Plumbing's bid is significantly low. Any contract with Quality Built that includes the mistake may be rescinded a. under no circumstances. b. if Quality Built knew or should have known of the mistake. c. if Plumbing knew or should have known of the mistake. d. if Orin's supervisor did not know of the mistake.

if Quality Built knew or should have known of the mistake.

Ray, an employee of Shipping Company, makes a substantial mathematical mistake in totaling estimated transportation costs for Tonnage Inc., which is seeking bids. Consequently, Shipping's bid is substantially low. Any contract with Tonnage that includes the mistake may be rescinded a. if the mistake was unilateral. b. if the mistake was made inadvertently and without gross negligence. c. under no circumstances. d. if the mistake was intentional

if the mistake was made inadvertently and without gross negligence

Restaurant Food Inc. intends to sell a certain quantity of beef for $1,100. In e-mail, however, the firm's sales representative mistakenly offers to sell the beef to Steak House for $1,000, Steak's manager immediately accepts. The seller a. is bound to the deal but can charge the intended price. b. can rescind the deal and recover damages for the mistake. c. is bound to the deal at the offered price. d. can rescind the deal.

is bound to the deal at the offered price

County Title Company processes information furnished by others to transfer title to real estate from Dali to Ezra. The furnished information is mistaken. The contract between Dali and Ezra may be rescinded because the mistake a. may be rescinded if the mistake is subject to only one interpretation. b. none of the choices c. may be rescinded because the mistake affects a third party. d. may be rescinded because the mistake is about a material fact.

may be rescinded because the mistake is about a material fact.

Bram, a salesperson for Cruisin' Motors, promises Dot a certain car will give her a "smooth ride." Bram offers a test drive, which Dot declines. She buys the car but soon realizes its suspension is in poor condition. Dot can rescind the contract on the ground of a. the car maker's undue influence. b. the salesperson's fraudulent misrepresentation. c. none of the choices. d. the buyer's mistake

none of the choices

Ralph enters into a contract with Skye to buy her land based on her assertion that the land is open to development. After the sale, Ralph learns that only a small section of the land can be built on. A local law prohibits construction on the rest of the property. Ralph can a. not avoid the contract because persons are assumed to know the law. b. avoid the contract due to fraud. c. avoid the contract due to undue influence. d. avoid the contract due to a bilateral mistake

not avoid the contract because persons are assumed to know the law

Carlos and David contract for the sale of five hundred head of Carlos's cattle for $195 per head. Unknown to either party, an unforeseen storm has struck the herd and many of the cattle have died. David is a. entitled to recover the value of the lost cattle. b. required to pay because he assumed the risk the cattle might die. c. not required to pay due to the bilateral mistake. d. not required to pay due to the unilateral mistake

not required to pay due to the bilateral mistake

Open Range agrees to sell Pinewood Ranch a remote parcel of land for $15,000. Both parties believe the land to be worthless, but beneath it is shale rock containing oil. A court would a. not rescind the contract. b. rescind the contract on the basis of a mistake of quality. c. rescind the contract on the basis of a mistake of opinion. d. rescind the contract on the basis of a mistake of value

not rescind the contract.

Dana believes that a new phone to be sold by Ear Fruit Inc. will become the most popular phone in the market. Dana enters into a contract to buy 500 shares of Ear Fruit stock, anticipating an increase in its value. The phone does not become popular, and the price of the stock does not rise. Dana can recover a. the amount of the purchase price. b. the amount of the purchase price plus the unexpected decrease. c. nothing. d. the amount of the purchase price plus the expected increase.

nothing

Dyan enters into a contract with Eli, who claims to have access to a stock-trading algorithm that will multiply an investment many times over. When the results do not match this claim, Dyan learns that Eli does not have access to the algorithm and files a suit, alleging fraud. Dyan must show harm to a. undo Eli's influence. b. punish the defendant. c. rescind the contract. d. recover damages

recover damages

In selling a vacant building, Riley, a real estate broker, tells Saki that the property has a certain capacity, making it suitable for a nightclub. Riley knows nothing about the capacity of the building, but it is not as he specifies. Saki buys the building. Saki's best course of action is most likely to a. scam Riley. b. sabotage Riley's career with bad publicity. c. induce Riley to remit to Saki the commission on Riley's next sale. d. recover damages or rescind the contract to buy the building

recover damages or rescind the contract to buy the building

Ned threatens physical harm to force Omar to pay for "protecting" Omar's restaurant, Pasta Plates, from vandalism. Most likely, Omar may a. recover from the local police for their failure to protect his restaurant. b. do nothing once he has agreed to pay. c. recover from his insurer for the cost. d. rescind the contract or refuse to comply with its terms.

rescind the contract or refuse to comply with its terms.

At an auction, Ben bids on a 1957 Chevy coupe, believing that it is worth more than the price asked. When the car proves to need more repairs than Ben estimated, and thus is worth less as is, Ben is a. not liable on the bid because the need for repair is not a material fact. b. still liable on the bid. c. not liable on the bid because he underestimated the cost of repairs. d. not liable on the bid because the auctioneer misrepresented the value

still liable on the bid

Ked, a real estate agent, assures Lida that a certain parcel of commercial property fronts on the most highly trafficked street in Metro City. Lida buys the property and then discovers that the street has no more traffic than any other in its vicinity. Lida may recover damages for a. the city's undue influence. b. none of the choices. c. the buyer's mistake. d. the agent's fraudulent misrepresentation.

the agent's fraudulent misrepresentation

Mary owns two all-terrain vehicles (ATVs), worth $1,000 and $500, respectively. Neil enters into a contract to buy "Mary's ATV" for $750. Mary believes, in good faith, that she is selling the $500 ATV. Neil believes, in good faith, that he is buying the $1,000 ATV. In this situation a. the contract is not enforceable. b. Mary is entitled to $750 for the $500 ATV. c. Neil is entitled to the $1,000 ATV for $750. d. Neil must buy both ATVs for $1,500

the contract is not enforceable

In entering into a contract with Marc for the sale of a cold storage warehouse, Nan fails to reveal the fact that the freezers do not consistently maintain a proper temperature. Most likely, this is fraudulent misrepresentation if a. Nan is not aware of the fact. b. the fact is a serious defect known to Nan but not to Marc. c. the fact concerns the value or quality of the freezers. d. any of the choices.

the fact is a serious defect known to Nan but not to Marc

Big Dig LLC makes an offer to perform an excavation and related tasks for Commercial Development Corporation, but due to a substantial mathematical mistake, significantly underprices the work. Commercial accepts the offer. Data Big's best defense against enforcement of the contract is that Commercial knew a. a mistake of value supports the cancellation of a contract. b. a unilateral mistake supports the cancellation of a contract. c. the price was below the prices of comparable services. d. a bilateral mistake supports the cancellation of a contract.

the price was below the prices of comparable services.

Eugene, an accountant, convinces his client Faye to enter into a contract to invest her savings in Gathering, a non-existent social media site. There is clear and convincing evidence that Faye did not act out of her free will. This is a. mistake. b. duress. c. fraudulent misrepresentation. d. undue influence

undue influence

Huey, a tennis pro, convinces Ian, who has no athletic ability, that he has considerable skill and induces him to pay $1,000 for tennis lessons. This is most likely a. mistake. b. fraudulent misrepresentation. c. undue influence. d. none of the choices.

undue influence

Raoul, who is Stef's guardian, convinces her to buy a certain parcel of land from Tyrone at a greatly inflated price. Raoul may be liable for a. mistake. b. undue influence. c. fraudulent misrepresentation. d. duress

undue influence

Ewa is induced by her guardian Filo to sign a contract to invest funds in Gold Inc. through Filo's investment firm. Unknown to Ewa, Filo realizes a commission from the investment. Most likely, Ewa can rescind the contract on the basis of a. fraud. b. undue influence. c. mistake. d. duress.

undue influence.

A misunderstanding concerning a basic assumption on which a contract is made will support the rescission of the deal if the mistake is a. bilateral. b. unilateral. c. lateral. d. any of the choices.

bilateral

Analytics LLC processes misinterpreted data furnished by Botch Services to propose a marketing plan for Clientele Inc. Analytics and Clientele are both ignorant of the mistaken data. Their contract can be rescinded on the basis of a. a unilateral mistake. b. none of the choices. c. a mistake of quality. d. a bilateral mistake

a bilateral mistake

Beryl enters into a contract with Clay for a guided tour of Deep Canyon. Clay represents that he is an experienced, knowledgeable guide, when in reality he has never been in the canyon. Most likely, Beryl a. can rescind the deal based on fraudulent misrepresentation. b. might recover damages for the mistake. c. could exert duress to obtain a new guide. d. must comply with the contract because the representation is an opinion

can rescind the deal based on fraudulent misrepresentation.

Dim threatens physical harm to force Eb to sell his Flower Shop to Dim for a below-market price. This is a. duress. b. fraudulent misrepresentation. c. mistake. d. undue influence.

duress