Chapter 15: Mistakes, Fraud and Voluntary Consent Flashcards
T or F: A mistake of fact might allow a contract to be cancelled.
True
A mistake that occurs when one party to a contract is mistaken as to a material fact.
unilateral mistake
Unilateral Mistakes cannot be cancelled unless:
- the other party to the contract knows/should have known that a mistake of fact was made
- if mistake was due to an inadvertent mathematical and without gross negligence
A mistake that occurs when both parties to a contract are mistaken about the same material fact.
bilateral mistake
T or F: In a bilateral mistake, mistakes can be rescinded by either party.
True
T or F: In mistakes of value, generally the contract is enforceable by either party.
True
An act for the prevention of frauds and preinjuries
statute of frauds
T or F: There are seven types of contracts that have to be in writing to be enforceable.
False, there is 6
The purpose of the statue of frauds is to:
prevent harm to innocent parties by requiring written evidence of agreements
T or F: A fact that is important and central to the subject matter of a contract is a material fact.
True
T or F: Generally, a unilateral mistake does not give the mistaken party any right to relief from the contract.
True
T or F: Each party to a contract assumes the risk that the value of the object of the deal will change in the future.
True
T or F: In general, a person should not rely on a non-lawyer’s statement about a point of law.
True
T or F: Reliance on a misrepresentation is justified even if the innocent party knows the true facts.
False
T or F: Undue influence can arise from a confidential relationship or a relationship based on trust.
True
T or F: Forcing a party to enter into a contract under the fear of threats constitutes undue influence.
False
A contract that includes a bilateral mistake may be rescinded if the mistake involves
a. a material fact.
b. any fact.
c. an opinion.
d. none of the choices.
a. a material fact
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. mistake.
b. fraudulent misrepresentation.
c. none of the choices.
d. undue influence.
b. fraudulent misrepresentation
