Exam 11: Conduct Invalidating Assent

a. Name two types of nonfradulent misrepresentation and define each one. b. What remedies may be available for nonfraudulent misrepresentation?

Hal holds a gun to Irving's head and tells him to sign the contract. Irving signs the contract, because he fears for his personal safety. The contract is void, because it was entered into under duress.

Fraud in the inducement will render an agreement void.

Which of the following, if any, are requisites for fraud in the inducement?

Economic coercion that compels a person to enter into a contract renders that contract void.

The law requires that to form a valid contract the agreement must be voluntary and knowing.

Which of the following would be considered to be a misrepresentation of a material fact for purposes of establishing fraud in the inducement?

By holding a knife to his back, Ed compelled Sean to sign a contract advantageous to Ed. This contract was entered under:

Relationships that may lead to a court's careful scrutinization of contracts between the parties to make sure undue influence was not present include all but:

To sustain a case of fraud in the inducement, the injured party must prove that he actually relied upon the false representation.

An arm's length transaction is one in which the parties owe each other no special duties and each is acting in his or her self-interest.

Attorney Geraldine advises her client, Rick, to enter a contract, which ultimately would have benefited Geraldine but not Rick. The test of whether the contract, if entered, is voidable based on undue influence is whether Geraldine's advice would have dominated the thinking of an ordinary, reasonable person rather than whether it dominated Rick's mind or emotions.

The remedies of damages and rescission are available for:

James threatens to hit Kenneth in the head with a baseball bat unless Kenneth signs a contract agreeing to pay James $400 for his saw. Because of the threat, Kenneth signs the contract.

Acts constituting duress are necessarily crimes or torts in themselves.

Ty threatened to have Lisa's father prosecuted for embezzlement unless Lisa signed a contract to pay Ty 12 monthly payments of $500 each to purchase his car. Lisa cannot avoid the contract based on duress since the threat was toward Lisa's father rather than Lisa herself.

An arm's length transaction is one in which:

Fred is a concert violinist who is scheduled to perform at Carnegie Hall for the first time. He buys what he is told is a Stradivarius violin from a well-known, reputable dealer in quality violins, and he pays the going rate for a Stradivarius. He later learns the violin is an imitation, although it is a good imitation, which fooled even the dealer. In this case:

Generally, whether or not the parties deal at arm's length does not affect whether silence alone amounts to fraud.

For a misrepresentation to be actionable as fraud in the inducement, it must be a misrepresentation of opinion.