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Interactive Quiz for ALT-12e, Chapter 14
Chapter 14 – Mistakes, Fraud, and Voluntary Consent
1.
If you do not genuinely assent to a contract’s terms, you may:
a. legally assault the other party.
b. rescind, or cancel, the contract.
c. impose your own adhesion contract.
d. avoid the contract based on the Statute of Frauds.
Answers:
a. Incorrect. A lack of genuineness of assent does not give you the legal
right to assault the other party.
b. Correct. You may rescind, or cancel, a contract to which you have not
genuinely assented.
c. Incorrect. You may not impose a contract that reflects unequal
bargaining power because you did not genuinely assent to the terms of
the present contract.
d. Incorrect. A lack of genuineness of assent is not an issue covered by
the Statute of Frauds.
2.
Suppose that you purchase a purebred Scottish Terrier puppy. You pay
$800 for the dog because you think it comes from champion lines. The
dog’s owner did not discuss the dog’s ancestors with you. If you discover,
later, that the dog was not worth $800, but only $400, can you have the
contract rescinded, or canceled, based on your mistake?
a. Yes, the dog was clearly not worth $800.
b. Yes, because you had a duty to investigate.
c. Probably not, because you made a mistake about the dog’s value, not
a mistake of a material fact.
d. Probably so, because you made a mistake of an immaterial fact.
Answers:
a. Incorrect. Because the dog’s owner did not mislead you, you probably
made a mistake of judgment and you may not cancel the contract
based on such a mistake.
b. Incorrect. You may have owed yourself a duty to investigate, but this
duty does not change the fact that you cannot cancel the contract
based on a mistake of value.
c. Correct. You did not adequately check into the dog’s pedigree, and this
is your fault. Based on your error, you made a mistake of value.
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d. Incorrect. Your mistake is not the sort that a court will take into
consideration when it allows a contract to be rescinded based on a
mistake.
3.
Which of the following IS NOT an element of fraud?
a. There must be an intent to deceive.
b. The innocent party must have justifiably relied on the
misrepresentation.
c. The misrepresentation must concern a material fact.
d. The innocent party must be under twenty-one years of age.
Answers:
a. Incorrect. An intent to deceive is a required element of fraud.
b. Incorrect. The innocent, or defrauded, party must have been justified in
relying on the misrepresentation.
c. Incorrect. The misrepresentation must concern an important, or
material fact, rather than some minor fact.
d. Correct. There is no requirement that the innocent party be under
twenty-one years of age.
4.
A misrepresentation of a material fact can occur:
a. by action alone.
b. by words alone.
c. by words or actions.
d. by fax alone.
Answers:
a. Incorrect. You may misrepresent a material fact by your actions, but
this is not the only way to misrepresent such facts.
b. Incorrect. You may also misrepresent material facts by your actions.
c. Correct. You can misrepresent a material fact by both words and
actions.
d. Incorrect. Misrepresentation may happen by actions other than faxing
something to someone.
5.
When a court alters contract terms to reflect the true intentions of parties
to the contract, this is known as:
a. a rescission.
b. a reformation.
c. a cancellation.
d. a nullification.
Answers:
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a.
b.
c.
d.
6.
Incorrect. When a court rescinds a contract, it cancels it.
Correct. A reformation is a judge-directed change in contract terms.
Incorrect. A cancellation would be a termination of a contract.
Incorrect. A nullification would also be a termination of a contract.
Josephine buys a very rare tropical bird from Frank’s Rare Birds of the
Earth store. Josephine asks Frank where the bird is from, and Frank tells
her that it is from “the rainforests of Brazil. It is extremely rare, almost no
one has one.” When Josephine asks Frank if the bird is on the
endangered species list, Frank tells her that it is not on the list (even
though he has recently learned that it is on that list). Josephine later
discovers, when officials from an environmental agency arrive at her door
and take her bird away, that she has illegally purchased a bird that is on
the endangered species list. To recover damages (the purchase price of
the bird, plus any penalties levied by the environmental agency) from
Frank, Josephine would:
a. sue Frank for mistake.
b. sue Frank for defamation.
c. sue the environmental agency for regulatory overload.
d. sue Frank for fraudulent misrepresentation.
Answers:
a.
b.
c.
d.
7.
Incorrect. She may not sue for mistake.
Incorrect. She may not sue for defamation.
Incorrect. Josephine may not sue the agency for regulatory overload.
Correct. Josephine would sue Frank for fraudulent misrepresentation in
this situation.
If a party to a contract has an intent to deceive the other party, this is
known as:
a. scienter.
b. revision.
c. rescission.
d. optimization.
Answers:
a. Correct. Scienter is the Latin term for “guilty knowledge.”
b. Incorrect. Revision occurs when something, such as a contract, is
changed or modified.
c. Incorrect. Rescission is the cancellation of a contract.
d. Incorrect. Optimization is not a contract law term.
8.
The case of Sarvis v. Vermont State Colleges brings up which issue
associated with assent?
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a.
b.
c.
d.
Undue influence.
Fraudulent misrepresentation.
Mutual mistake.
Duress.
Answers:
a. Incorrect. Undue influence was not at issue in this case.
b. Correct. This case involved a job applicant who misrepresented his
past and his qualifications on a job application.
c. Incorrect. A mutual mistake was not at issue in this case.
d. Incorrect. This case did not involve duress.
9.
In an adhesion contract, who usually takes advantage of whom?
a. A seller takes advantage of a buyer.
b. A buyer takes advantage of a vendor.
c. A woman takes advantage of a man.
d. A child takes advantage of his or her parents.
Answers:
a. Correct. Typically a seller with greater bargaining power takes
advantage of a buyer with relatively little bargaining power.
b. Incorrect. These contracts typically do not involve buyers taking
advantage of vendors.
c. Incorrect. These contracts may involve female sellers taking advantage
of male buyers, but the important issue is the seller’s greater
bargaining power, not the gender of the parties involved.
d. Incorrect. These contracts generally do not involve a child taking
advantage of his or her parents.
10.
Which provision of the UCC has proved controversial with respect to
unconscionability?
a. Section 1–301.
b. Section 2–101.
c. Section 1–103.
d. Section 2–302.
Answers:
a.
b.
c.
d.
Incorrect. This section does not deal with unconscionability.
Incorrect. This section does not deal with unconscionability.
Incorrect. This section does not deal with unconscionability.
Correct. This section has proved controversial, because courts have a
difficult time determining which actions are unconscionable and which
are not.
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