Business Law Chapter 15 True & False

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Generally, a unilateral mistake affords the mistaken party a right to relief from the contract.

False

Misrepresentation can occur by words or actions, but not by silence.

False

Misrepresentation of a material fact cannot occur through conduct alone.

False

The element of justifiable reliance requires the misrepresentation to be the sole factor in inducing the deceived party to enter into the contract.

False

To recover for fraud, a plaintiff must be twenty-one or more years of age.

False

Voluntary consent may be lacking because of misrepresentation but not because of a mistake.

False

Because fraud actions necessarily involve wrongful conduct, courts may award punitive damages.

True

In some states, the courts prefer to rely on traditional notions of fraud, undue influence, and duress rather than the concept of unconscionability.

True

Many courts have broadened the concept of unconscionability to apply it in situations other than sales of goods.

True

Scienter clearly exists if a party knows a fact is not as stated.

True

When the dominant party in a fiduciary relationship benefits from that relationship, a presumption of undue influence arises.

True

Words or terms in contracts that are subject to more than one reasonable interpretation can lead to bilateral mistakes.

True

A negligent misrepresentation is not a basis for rescinding a contract.

False

A unilateral mistake is a mistake made by both parties to a contract.

False

An innocent party does not need to suffer an injury to collect damages as a result of a misrepresentation.

False

Any party who does not receive what he or she considers a fair bargain can argue mistake.

False

Courts typically set aside contracts because a party did not volunteer pertinent information.

False

Duress is a defense to the enforcement of a contract, but not a ground for rescission of a contract.

False

A material fact is a fact that a reasonable person would consider important when determining his or her course of action.

True

An innocent party can rescind a fraudulent contract and be restored to his or her original position.

True


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