Question 1

Reliance on an "expert's" statement of opinion may be the basis for an ac?tion based on fraud.

Accepted Answer

A) True 
 B)False

Question 2

Great City and Highway Construction Company (HCC) enter into a construction contract that includes si

Accepted Answer

A)  award damages to Great City for the mistakes. 
B)  award damages to HCC for the mistakes. 
C)  enforce the contract without requiring changes. 
D)  reform the contract to reflect the figures accurately. 
A)  award damages to Great City for the mistakes. 
B)  award damages to HCC for the mistakes. 
C)  enforce the contract without requiring changes. 
D)  reform the contract to reflect the figures accurately.

Question 3

Hillside Homes, Inc., and Ideal Builders, Inc., enter into a construction contract that includes si

Accepted Answer

A)  allow the parties to rescind the contract. 
B)  award damages to A for the mistakes. 
C)  award damages to B for the mistakes. 
D)  enforce the contract without requiring changes. 
A)  allow the parties to rescind the contract. 
B)  award damages to A for the mistakes. 
C)  award damages to B for the mistakes. 
D)  enforce the contract without requiring changes.

Question 4

Fact Pattern 14-B2 
Nano Corporation offers to sell a robotic device to Opal Assembly, Inc., but mistakenly transposes some of the digits in the price so that $15,400 appears in the offer as $14,500. Opal accepts the written offer.
-Refer to Fact Pattern 14-B2. Opal's best argument in favor of enforcement of the contract is that

Accepted Answer

A)  a bilateral mistake does not afford relief from a contract. 
B)  a mistake of value does not afford relief from a contract. 
C)  a unilateral mistake does not afford relief from a contract. 
D)  the price was below the prices of comparable devices. 
A)  a bilateral mistake does not afford relief from a contract. 
B)  a mistake of value does not afford relief from a contract. 
C)  a unilateral mistake does not afford relief from a contract. 
D)  the price was below the prices of comparable devices.

Question 5

Intent to deceive is an element of fraud.

Accepted Answer

A) True 
 B)False

Question 6

Lacy uses undue influence to induce Mina to sign a contract to invest her National Education Fund student loan money in Overseas Bank. Mina may

Accepted Answer

A)  avoid the contract. 
B)  do nothing after Mina signs the contract. 
C)  recover from National for a failure to monitor Mina's money. 
D)  recover from Overseas for a failure to undo Lacy's influence. 
A)  avoid the contract. 
B)  do nothing after Mina signs the contract. 
C)  recover from National for a failure to monitor Mina's money. 
D)  recover from Overseas for a failure to undo Lacy's influence.

Question 7

Alpha Investments, Inc., offers to buy Beta Computer Corporation. On May 1, Beta gives Alpha copies of Beta's financial statements for the pre?vious year. The statements show an inventory of $1 million. On May 15, Beta discovers that the previous year's inventory is overstated by $500,000, but does not inform Alpha. On June 1, Alpha, relying on the fi?nancial statements, buys Beta. On June 10, Alpha discovers the inven?tory over?statement. Can Alpha succeed in a suit against Beta for fraud?

Accepted Answer

Yes, Alpha can succeed in a suit against

Question 8

Misrepresentation of a material fact can occur through conduct alone.

Accepted Answer

A) True 
 B)False

Question 9

If a price quotation contains a mistake in the adding of a number of fig?ures, the contract may not be enforceable.

Accepted Answer

A) True 
 B)False

Question 10

To rescind a contract for fraud, a plaintiff must prove an injury.

Accepted Answer

A) True 
 B)False

Question 11

Nero makes an honest but erroneous statement that misrepresents a ma?te?rial fact in a contractual transaction with Odell. Nero is guilty of

Accepted Answer

A)  a unilateral mistake. 
B)  duress. 
C)  fraud. 
D)  innocent misrepresentation. 
A)  a unilateral mistake. 
B)  duress. 
C)  fraud. 
D)  innocent misrepresentation.

Question 12

An innocent party may seek damages for a fraudulent contract.

Accepted Answer

A) True 
 B)False

Question 13

To recover for fraud, a plaintiff must be under twenty-one years of age.

Accepted Answer

A) True 
 B)False

Question 14

Dora, an accountant, uses undue influence to induce her client Emily to invest in Fine Gems, Ltd., a business with little potential. When Emily learns the truth, she can

Accepted Answer

A)  do nothing. 
B)  enforce the contract but not rescind it. 
C)  enforce the contract or rescind it. 
D)  rescind the contract but not enforce it. 
A)  do nothing. 
B)  enforce the contract but not rescind it. 
C)  enforce the contract or rescind it. 
D)  rescind the contract but not enforce it.

Question 15

A contract is termed an adhesion contract when both parties adhere to it.

Accepted Answer

A) True 
 B)False

Question 16

Fact Pattern 14-B2 
Nano Corporation offers to sell a robotic device to Opal Assembly, Inc., but mistakenly transposes some of the digits in the price so that $15,400 appears in the offer as $14,500. Opal accepts the written offer.
-Refer to Fact Pattern 14-B2. Nano's best defense against enforcement of the contract is that Opal knew

Accepted Answer

A)  a bilateral mistake supports the cancellation of a contract. 
B)  a mistake of value supports the cancellation of a contract. 
C)  a unilateral mistake supports the cancellation of a contract. 
D)  the price was below the prices of comparable devices. 
A)  a bilateral mistake supports the cancellation of a contract. 
B)  a mistake of value supports the cancellation of a contract. 
C)  a unilateral mistake supports the cancellation of a contract. 
D)  the price was below the prices of comparable devices.

Question 17

A general contractor who suspects that a subcontractor's bid is a mis?take can still enforce the bid.

Accepted Answer

A) True 
 B)False

Question 18

Misrepresentation of a material fact cannot occur through conduct alone.

Accepted Answer

A) True 
 B)False

Question 19

Justifiable reliance is an element of fraud.

Accepted Answer

A) True 
 B)False

Question 20

A mistake of fact cannot be bilateral.

Accepted Answer

A) True 
 B)False

Exam 14: Mistakes, Fraud, and Voluntary Consent

Reliance on an "expert's" statement of opinion may be the basis for an ac?tion based on fraud.

Great City and Highway Construction Company (HCC) enter into a construction contract that includes si

Hillside Homes, Inc., and Ideal Builders, Inc., enter into a construction contract that includes si

Intent to deceive is an element of fraud.

Lacy uses undue influence to induce Mina to sign a contract to invest her National Education Fund student loan money in Overseas Bank. Mina may

Misrepresentation of a material fact can occur through conduct alone.

If a price quotation contains a mistake in the adding of a number of fig?ures, the contract may not be enforceable.

To rescind a contract for fraud, a plaintiff must prove an injury.

Nero makes an honest but erroneous statement that misrepresents a ma?te?rial fact in a contractual transaction with Odell. Nero is guilty of

An innocent party may seek damages for a fraudulent contract.

To recover for fraud, a plaintiff must be under twenty-one years of age.

Dora, an accountant, uses undue influence to induce her client Emily to invest in Fine Gems, Ltd., a business with little potential. When Emily learns the truth, she can

A contract is termed an adhesion contract when both parties adhere to it.

A general contractor who suspects that a subcontractor's bid is a mis?take can still enforce the bid.

Misrepresentation of a material fact cannot occur through conduct alone.

Justifiable reliance is an element of fraud.

A mistake of fact cannot be bilateral.

Introduction to Law and Legal Reasoning

Courts and Alternative Dispute Resolution

Court Procedures

Constitutional Authority to Regulate Business

The Statute of Fraudswriting Requirements

Ethics and Business Decision Making

Intentional Torts

Negligence and Strict Liability

Intellectual Property and Internet Law

Criminal Law and Cyber Crimes

Nature and Terminology

Agreement

Consideration

Capacity and Legality

Third Party Rights

Performance and Discharge

Breach of Contract and Remedies

E-Contracts and E-Signatures

The Formation of Sales and Lease Contracts

Title, Risk, and Insurable Interest

Performance Breach of Sales Lease Contracts

Warranties and Product Liability

The Function Creation of Negotiable Instruments

Transferability and Holder in Due Course

Liability, Defenses, and Discharge

Checks, the Banking System, and E-Money

Creditors Rights and Remedies

Secured Transactions

Bankruptcy Law

Agency Formation and Duties

Liability to Third Parties and Termination

Employment and Labor Law

Employment Discrimination

Sole Proprietorships and Franchises

Partnerships and Limited Liability Partnerships

Limited Liability Companies Special Business Forms

Corporationsformation and Financing

Corporationsdirectors, Officers, Shareholders

Corporationsmerger, Consolidation, Termination

Corporationssecurities Law Corporate Governance

Law for Small Businesses

Administrative Law

Consumer Law

Environmental Law

Antitrust Law

Personal Property and Bailments

Real Property and Landlord-Tenant Relationships

Insurance

Wills and Trusts

Professional Liaility and Accountability

International Law in a Global Economy

Legal and Ethical Issues in Business

Legal Issues

Contracts and Business Law

Contracts and Liability

Banking and Payment Systems

Loan Security and Repossession in Credit Transactions

Employment Law and Ethics

Legal Issues in Corporate Governance and Business Operations

Legal and Ethical Issues in Environmental Protection and Consumer Rights

Legal Issues in Property and Land Use

Accounting and Ethics