Question 1

A seller's attempt to conceal a fact that is material to a contract can give rise to an action for fraud.

Accepted Answer

A) True 
 B)False

Question 2

A mistake of value warrants contract rescission.

Accepted Answer

A) True 
 B)False

Question 3

Phoebe enters into a contract with Everest for a guided tour of Whitewater Canyon. Everest acts as though he is an experienced,knowledgeable guide,when in reality he has never been in the canyon. Phoebe is most likely a victim of

Accepted Answer

A) undue influence. 
B) fraud. 
C) mistake. 
D) nothing. 
A) undue influence. 
B) fraud. 
C) mistake. 
D) nothing.

Question 4

Mona is induced by her guardian Newt to sign a contract to invest her student loan funds in OmniBank through Newt's investment firm. Unknown to Mona,Newt realizes ongoing commissions from the investment. Most likely,Mona may

Accepted Answer

A) not rescind the contract. 
B) rescind the contract on the basis of undue influence. 
C) rescind the contract on the basis of mistake. 
D) rescind the contract on the basis of unconscionability. 
A) not rescind the contract. 
B) rescind the contract on the basis of undue influence. 
C) rescind the contract on the basis of mistake. 
D) rescind the contract on the basis of unconscionability.

Question 5

All mistakes of fact are material.

Accepted Answer

A) True 
 B)False

Question 6

A unilateral mistake always gives the mistaken party a right to relief from the contract.

Accepted Answer

A) True 
 B)False

Question 7

Reliance on a misrepresentation is justified if the misrepresentation is an obviously extravagant statement.

Accepted Answer

A) True 
 B)False

Question 8

A material fact is a fact that a reasonable person would consider important when determining his or her course of action.

Accepted Answer

A) True 
 B)False

Question 9

An innocent party can rescind a fraudulent contract and be restored to his or her original position.

Accepted Answer

A) True 
 B)False

Question 10

In selling a commercial building,Birdie tells Colt that theproperty has a certain capacity,making it suitable for a nightclub. Birdie knows nothing about the capacity of the building,but it is not as she specifies. Colt buys the building.
-Refer to Fact Pattern 14-4. On learning the truth,Colt confronts Birdie,who says she was not trying to fool him-she was only trying to make a sale. This is

Accepted Answer

A) a mistake of value. 
B) a valid defense to a charge of fraud. 
C) misrepresentation. 
D) unconscionable. 
A) a mistake of value. 
B) a valid defense to a charge of fraud. 
C) misrepresentation. 
D) unconscionable.

Question 11

Lewis,an employee of Silos,Inc.,makes a substantial mathematical error in totaling the estimated costs for a project for which AgriCo-op is seeking bids. Consequently,Silos's bid is significantly low.
-Refer to Fact Pattern 14-2. Any contract with AgriCo-op that includes the mistake may be rescinded

Accepted Answer

A) if AgriCo-op knew or should have known of the mistake. 
B) if Lewis's supervisor did not know of the mistake. 
C) if Silos knew or should have known of the mistake. 
D) under no circumstances. 
A) if AgriCo-op knew or should have known of the mistake. 
B) if Lewis's supervisor did not know of the mistake. 
C) if Silos knew or should have known of the mistake. 
D) under no circumstances.

Question 12

Shelby wants to sell his Bobcat Skidsteer for $21,000. He e-mails Dave and offers to sell Dave the Bobcat. Due to a typo,Shelby tells Dave that he wants $20,100 for the Bobcat. Dave accepts the offer and pays Shelby $20,100. Shelby is

Accepted Answer

A) not bound by the contract due to a unilateral mistake. 
B) not bound by the contract due to a bilateral mistake. 
C) not bound by the contract due to a mistake of value. 
D) bound by the contract. 
A) not bound by the contract due to a unilateral mistake. 
B) not bound by the contract due to a bilateral mistake. 
C) not bound by the contract due to a mistake of value. 
D) bound by the contract.

Exam 14: Voluntary Consent

A seller's attempt to conceal a fact that is material to a contract can give rise to an action for fraud.

A mistake of value warrants contract rescission.

Phoebe enters into a contract with Everest for a guided tour of Whitewater Canyon. Everest acts as though he is an experienced,knowledgeable guide,when in reality he has never been in the canyon. Phoebe is most likely a victim of

Mona is induced by her guardian Newt to sign a contract to invest her student loan funds in OmniBank through Newt's investment firm. Unknown to Mona,Newt realizes ongoing commissions from the investment. Most likely,Mona may

All mistakes of fact are material.

A unilateral mistake always gives the mistaken party a right to relief from the contract.

Reliance on a misrepresentation is justified if the misrepresentation is an obviously extravagant statement.

A material fact is a fact that a reasonable person would consider important when determining his or her course of action.

An innocent party can rescind a fraudulent contract and be restored to his or her original position.

Shelby wants to sell his Bobcat Skidsteer for $21,000. He e-mails Dave and offers to sell Dave the Bobcat. Due to a typo,Shelby tells Dave that he wants $20,100 for the Bobcat. Dave accepts the offer and pays Shelby $20,100. Shelby is

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