Chapter 13

Question 1

What kinds of mistakes in contracts, most generally, may invalidate the contract? Which are not?

Answer 1

Only a mistake of fact is voidable and the mistake must involve some MATERIAL fact.

Question 2

In what two forms may mistakes of fact occur?

Answer 2

Unilateral or bilateral (mutual)

Question 3

Which is mistake is most reacindable in a contract, unilateral or bilateral?

Answer 3

Bilateral mistakes in contracts may render such a contract void and the contract may be rescinded by both parties.

Question 4

What are the two exceptions to irescindability of a unilateral mistake

Answer 4

1.The OTHER party knows or should have known that a mistake of fact was made.

2. The error was due to a substantial mathematical mistake and was made inadvertently and without gross negligence.

Question 5

In a bilateral mistake, what are the options of the parties involved?

Answer 5

The contract can be rescinded, or canceled, by either party. Normally the contract is voidable by the adversely affected party and can be rescinded.

Question 6

What are mistakes of value and can contrasts be rescinded because of them?

Answer 6

Mistakes of value concern the market value or quality of the object of the contract, and is not rescindable.

Question 7

What can the innocent party do in the case of a fraudulent contract?

Answer 7

Normally, the innocent party can either rescind the contract and be restored to their original position, or enforce the contract and seek damages for harms resulting from fraud.

Question 8

What does fraud typically involve?

Answer 8

1. A misrepresentation of a material fact must occur
2. There must be an intent to deceive
3. The innocent party must justifiably rely on the misrepresentation.
4. To collect damages, a party must have been harmed as a result of the misrepresentation.

Question 9

How may something be considered a misrepresenation?

Answer 9

A party willfully conceals material information from another party

Question 10

Do misrepresenations of law always count as fraud?

Answer 10

No, generally it is assumed that parties are aware of state and local laws. A.though there may be an exception if the party making the fraudulent claim is reasonably expected to have professional knowledge of such laws.

Question 11

Do statements lf opinion or puffery count a fraud?

Answer 11

Nope. But when the buyer is naive and depends on an expert, there is certainly fraud.

Question 12

What is a scienter?

Answer 12

Knowledge on the part of a misrepresenting party that material facts have been falsely represented or omitted with an intent to deceive.

Question 13

In an innocent misrepresentation, what occurs to the contract?

Answer 13

The contract may be rescinded but the victim often cannot seek damages

Question 14

What allows someone to recover a down payment in statute of frauds?

Answer 14

Unjust enrichment

Question 15

What id nevessary for part performanc

Answer 15

Possession

Substantial improvement

Question 16

What is an afformative defense?

Answer 16

A defense that has to be used at very first opportunity

Question 17

In real estate, when does the one year rule begin?

Answer 17

When the performance is wxecuted