Chapter 12: Defenses to Contract Enforceability

Question 1

Voluntary Consent may be lacking because of

Answer 1

Mistake
Fraudulent Misrepresentation
Undue Influence
Duress

Question 2

What are the different kinds of mistakes?

Answer 2

Mistakes of Fact

Mistakes of Quality

Question 3

What is the only mistake to allow a contract to be canceled?

Answer 3

Mistakes of Fact

Question 4

One party is mistaken as to a material fact

Answer 4

Unilateral Mistake of fact

Question 5

Does not give the mistaken party any right to relief from the contract

Answer 5

Unilateral Mistake of fact

Question 6

Mutual misunderstanding concerning a basic assumption on which the contract was made

Answer 6

Bilateral Mistakes of fact

Question 7

Presence of _____ effects the authenticity of the innocent party’s to consent to a contract

Answer 7

fraud

Question 8

Usually can be avoided (voidable) because she or he has not voluntarily consented to a contrct

Answer 8

Fraudulent Misrepresentation

Question 9

What are the 3 elements to Fraud

Answer 9

Misrepresentation of a material fraud must occur
Must be an intent to deceive
Innocent party must justifiably rely on the misrepresentation

Question 10

To collect damages on fraudulent misrepresentation, a party must have been

Answer 10

Harmed as a result of the misrepresentation

Question 11

A party takes specific action to conceal a fact that is material to the contract

Answer 11

Misrepresentation by Conduct

Question 12

Untruthful denial of knowledge or information concerning facts that are material to the contract when such knowledge or information is requested

Answer 12

Misrepresentation by Conduct

Question 13

Not subject to claims of fraud

Answer 13

Statements of Opinion

Question 14

When a naive purchaser relies on an opinion from an expert, the innocent party may be entitled to

Answer 14

Rescission or Reformation

Question 15

Ordinarily does not entitle a party to be relieved of a contract

Answer 15

Misrepresentation of Law

Question 16

Neither party to a contract has a duty to come forward and disclose facts

Answer 16

Misrepresentation by silence

Question 17

Seller must disclose only

Answer 17

Latent Defects

Question 18

When parties are in a fiduciary relationship, there is a duty to disclose

Answer 18

Material Facts

Question 19

Knowledge by a misrepresenting party that material facts have been falsely represented or omitted with an intent to decieve

Answer 19

Scienter

Question 20

Exists if a party makes a statement that he or she believes not to be true or makes a statement recklessly without regard to whether it is true or false

Answer 20

Intent to Deceive

Question 21

The misrepresentation must be an important factor in inducing the party to enter into the contract

Answer 21

Justifiable Reliance on the Misrepresentation

Question 22

Reliance is not justified if the innocent party knows the true facts or relies on

Answer 22

obviously extravagant statements

Question 23

Most courts do not require a showing of harm when the action is to rescind the contract

Answer 23

Injury to the innocent party

Question 24

To recover damages for injury to the innocent party, this is universally required

Answer 24

Proof of an injury

Question 25

Arises from relationships in which one party can greatly influence another party, overcoming the party’s free will

Answer 25

Undue Influence

Question 26

What is the essential feature of undue influence

Answer 26

The party being taken advantage of does not exercise free will in entering into a contract

Question 27

Use of treats to force a party to enter into a contract

Answer 27

Duress

Question 28

This is generally not sufficient to constitute duress

Answer 28

Economic Duress

Question 29

Primary purpose is to ensure that for certain types of contract, there is reliable evidence of the contracts and their terms

Answer 29

Statute of Frauds

Question 30

What kinds of contracts need to be in writing?

Answer 30

Contracts involving interests in land
Cannot by their terms be performed within one year from the day after the date of formation
Collateral Contracts
Promises made in consideration of marriage
Under the UCC - contracts for the sale of good prices at $500 or more

Question 31

Describe the one year rule

Answer 31

If a contract cannot, by its terms, be performed within one year from the day after the date of formation

Question 32

A secondary promise to a primary transaction, such as a promise made by one person to pay the debts of another if the latter fails to perform

Answer 32

Collateral Promises

Question 33

An oral promise to answer for the debt of another is covered by the statute of frauds unless the guarantor’s purpose in accepting secondary liability is to secure a personal benefit

Answer 33

Main Purpose Rule

Question 34

An agreement made before marriage that defines each partner’s ownership rights in the other partner’s property

Answer 34

Prenuptual Agreements

Question 35

Contract will not be enforceable for any quantity than that set forth in writing

Answer 35

Contracts for the Sale of Goods

Question 36

Under the UCC, a contract for the sale of goods must be more than

Answer 36

$500

Question 37

Exceptions to the Statute of Frauds include

Answer 37

Partial Performance
Admissions
Promissory Estoppel
Customized Goods

Question 38

Any confirmation, invoice, sales slip, check, fax, or e-mail constitutes this

Answer 38

Writing

Question 39

A rule of contracts under which a court will not receive into evidence prior or contemporaneous oral statements and agreements that contradict the terms of the parties written contract

Answer 39

Parol Evidence Rule

Question 40

Testimony or other evidence of communications between the parties that is not contained in the contract itself

Answer 40

Parol Evidence

Question 41

Exceptions to the Parol Evidence Rule

Answer 41

Contracts subsequently modified
Voidable or Void contracts
Contracts containing ambiguous terms
Incomplete contracts
Prior dealing, course of performance, or usage of trade
Contracts subject to an orally agreed on condition precedent
Contracts with an obvious or gross clerical error

Question 42

Determination of whether evidence will be allowed basically depends on whether the written contract is intended to be a complete and final statement of the terms of the agreement

Answer 42

Integrated Contract

Question 43

A written contract that constitutes the final expression of the parties’ agreement

Answer 43

Integrated Contract

Question 44

Evidence extraneous to the contract that contradicts or alters the meaning of the contract in any way is inadmissible with this kind of contract

Answer 44

Fully Integrated