Chapter 15 - Mistakes, Fraud, and Voluntary Consent

Question 1

Adhesion Contract

Answer 1

A “standard-form” contract, such as that between a large retailer and a consumer, in which the stronger party dictates the terms.

Question 2

Bilateral Mistake

Answer 2

A mistake that occurs when both parties to a contract are mistaken about the same material fact.

Question 3

Duress

Answer 3

Unlawful pressure brought to bear on a person, causing the person to perform an act that he or she would not otherwise perform (or refrain from doing something the person would otherwise have done).

Question 4

Innocent Misrepresentation

Answer 4

A false statement of fact or an act made in good faith that deceives and causes harm or injury to another.

Question 5

Latent Defect

Answer 5

A defect that is not obvious or cannot readily be ascertained.

Question 6

Negligent Misrepresentation

Answer 6

Any manifestation through works or conduct that amounts to an untrue statement of fact made in circumstances in which a reasonable and prudent person would not have done that which led to the misrepresentation. A representation made with an honest belief may still be negligent due to (1) a lack of reasonable care in ascertaining the facts, (2) the manner of expression, or (3) the absence of the skill or competence required by a particular business of professions.

Question 7

Scienter

Answer 7

Knowledge by the misrepresenting party that material facts have been falsely represented or omitted with an intent to deceive.

Question 8

Undue Influence

Answer 8

Persuasion that is less than actual force but more than advice and that induces a person to act according to the will or purposes of the dominating party.

Question 9

Unilateral Mistake

Answer 9

A contract that results when an offer can be accepted only by the offeree’s performance.

Question 10

Voluntary Consent

Answer 10

Knowing and voluntary agreement to the terms of a contract. If voluntary consent is lacking, the contract will be voidable.