Chapter 15 Mistakes, Fruad And Voluntary Consent

Question 1

Mistake of fact must involve a fact that a reasonable person would consider important when determining his or her course of action

Answer 1

Material fact

Question 2

To void contract based upon a mistake

Answer 2

Mistake of fact

Material fact

Question 3

Unilateral vs bilateral mistake

Answer 3

Unilateral is typically still enforceable I

Question 4

Unilateral mistakes

Exceptions to enforceability

Answer 4

1. Other party knows of should have known about the mistake of fact
2. the error was due to a substantial mathematical mistake made inadvertently.
   * must be material fact in both cases*

Question 5

When both parties are mistaken about the same material fact, the contact can be …

Answer 5

Rescinded at any time

Question 6

When parties attach materially different meaning to a word/term in a contract a court may allow the contract to be rescinded because there was no true …

Answer 6

” meeting of the minds”

Question 7

Only a mistake of…. Makes a contract voidable

Answer 7

Fact NOT value or quality

Question 8

Scienter clearly exists if a party —-

Answer 8

Knows a fact is not as stated.

• makes a statement recklessly without regard to wether it is true or false
• party says or implies that a statement is made on some basis( personal knowledge/ investigation) when it is not

Question 9

If a person makes a false statement that they believe to be true but that actualy misrepresents that material facts the person is not guilty of fraud but–

Answer 9

Innocent misrepresentation

Question 10

Aggrieved party in the case of innocent misrepresentation can seek–

Answer 10

To rescind the contract but generally cannot collect damages

Question 11

If a party misrepresents via carelessness/ does not exersizes the skill and competence that her or his perfession requires then the misrepresentation may constitute

Answer 11

Negligent misrepresentation

Question 12

Negligent misrepresentation is treated as—- even though the misrepresentation was not purposeful

Answer 12

Fraudulent misrepresentation

Question 13

The deceived party must have a justifiable reason for relying on the misrepresentation

T or f

Answer 13

T

Question 14

To recover damages by fraud proof of harm is —-

Answer 14

Universally required

Question 15

Most courts do not require proof of injury to rescind the contract

T or f

Answer 15

T

Question 16

Fraudulent damages can include punitive as well as the proved actual loss.

T or f

Answer 16

T

Question 17

Undue influence arises when

Answer 17

Based upon a relationship one party can greatly influence another party, thus overcoming that parties free will.

Question 18

The essential feature of undue influence is that the party being taken advantage of does not—-

Answer 18

In reality, exersizes free will in entering into a contract.

Must be clear and convincing evidence

Question 19

When a contract enriches the dominant party, the court will often presume that the contract was made —

Answer 19

Under undue influence

Question 20

The use of threats to force a party into contract

Answer 20

Duress

Question 21

To establish duress, there must be

Answer 21

Proof of a threat to do something that the threatening party has no right to do

Question 22

A court would normally find the threat of a civil suit to be duress

T or f

Answer 22

F

Question 23

Economic duress is typically not sufficient to constitute duress

T or f

Answer 23

T

Question 24

Only a mistake of—– makes a contract voidable

Answer 24

Fact

Question 25

To make a contract voidable on the basis of mistake of fact the fact must be

Answer 25

Material fact

Question 26

When one party makes a mistake they can

Answer 26

Do nothing because the contract is enforceable

Question 27

Even when a unilateral mistake is made a contract may be enforceable if the other party to the contract knows or should have known that a mistake of fact was made True of false

Answer 27

True

Question 28

A substantial mathematical al mistake that was made without gross negligence will allow a unilateral mistake to be eligible for relief True or false

Answer 28

True

Question 29

In a bilateral situation of the mistake relates to the value of quality of the subject matter either party can -------- the contact

Answer 29

Enforce

Question 30

When an innocent party is fraudulently induced into a contract the contract can normally be avoided because that party has not voluntarily consented to its terms True or false

Answer 30

True

Question 31

A seller preventing a buyer from learning of some fact that is material would constitute

Answer 31

Misrepresentation by conduct

Question 32

If the dominant party is enriched then courts often assume

Answer 32

Undue influence

Question 33

Most adhesion contracts are standard-form contracts that contain fine print provisions that shift a risk ordinarily born by one party to another True or false

Answer 33

True

Question 34

Section ? Of the UCC permits the court to refuse a clause or contact based upon unconscionably

Answer 34

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