Ch. 11

Question 0

Physical Duress

Answer 0

When one party compels another to manifest assent to a contract through physical force

• Renders contract VOID

Question 1

Duress

Answer 1

Any wrongful or unlawful act or threat that overcomes the free will of a party

Question 2

Improper Threats

Answer 2

Acts, including economic and social coercion, that compel a person to enter a contract

• Must leave the victim with no reasonable alternative
• Renders contract VOIDABLE

Question 3

Undue Influence

Answer 3

The unfair persuasion of a person by a party in a dominant position based on a confidential relationship

• Renders contract VOIDABLE

Question 4

Fraud in the Execution

Answer 4

Misrepresentation that deceives the person as to the very nature of the contract

• Renders contract VOID

Question 5

Fraud in the Inducement

Answer 5

Am intentional misrepresentation of material fact by one party to the other

• Renders contract VOIDABLE

Question 6

5 Requisites for Fraud in the Inducement:

Answer 6

1. ) A false representation
2. ) of fact
3. ) that is material and
4. ) made with knowledge of its falsity & the intention to deceive and
5. ) which representation is justifiably relied on.

Question 7

Misrepresentation

Answer 7

Misleading conduct or an assertion not in accord with the facts, made through a positive statement

Question 8

Concealment

Answer 8

An action intended or known to be likely to keep another from learning a fact he otherwise would have learned

Question 9

Silence

Answer 9

Nondisclosure

Question 10

Arm’s-Length Transaction

Answer 10

When the parties owe each other no special duties and each is acting in his/her own self-interest

Question 11

Fiduciary

Answer 11

A person in a confidential relationship who owes a duty of trust, loyalty, & confidence to another

Question 12

Fact

Answer 12

An event that actually took place or a thing that actually exists

Question 13

Opinion

Answer 13

A representation that expresses only the uncertain belief of the representer as to the existence of a fact

Question 14

Puffing

Answer 14

Sales talk that is bragging, exaggerating, or overstatement

Question 15

Scienter

Answer 15

The misrepresentation is known to be false and is made with an intent to deceive.

Question 16

Knowledge of falsity consists of one or more of what 3 things?

Answer 16

1. ) Actual knowledge
2. ) Lack of belief in the statement’s truthfulness
3. ) Reckless indifference as to its truthfulness

Question 17

A person is not entitled to relief unless she has _______ ________ on the misrepresentation.

Answer 17

Justifiably Relied

Question 18

Negligent Misrepresentation

Answer 18

A false representation that is made without due care in ascertaining its truthfulness

• Renders contract VOIDABLE

Question 19

A misrepresentation is MATERIAL if:

Answer 19

1. ) It would be likely to induce a reasonable person to manifest assent, or
2. ) The maker knows that it would be likely to induce the recipient to do so.

Question 20

Innocent Misrepresentation

Answer 20

A false representation made without knowledge of its falsity but with due care

• Renders contract VOIDABLE

Question 21

Mistake

Answer 21

A belief that is not in accord with the facts

Question 22

Mutual Mistake

Answer 22

When both parties are mistaken as to the same set of facts

Question 23

Unilateral Mistake

Answer 23

When only one of the parties is mistaken