Chapter 15 Quiz

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Question #1

A party who can show that he or she did not genuinely agree to the terms of a contract has a defense against its enforcement.

A True

B False

Question #2

A fact that is important and central to the subject matter of a contract is a material fact.

A True

B False

Question #3

Data Inc. offers to provide certain services to Enterprise LLC, but mistakenly transposes some of the digits in the price so that $15,400 appears in the offer as $14,500. Enterprise accepts the written offer. Enterprise’s best argument in favor of enforcement of the contract is

A a bilateral mistake does not afford relief from a contract.

B the price was below the prices of comparable services.

C a mistake of value does not afford relief from a contract.

D a unilateral mistake does not afford relief from a contract.

Question #4

For purposes of fraudulent misrepresentation, scienter clearly exists if a party asserting a fact knows it is not as stated.

A False

B True

Question #5

Mary owns two all-terrain vehicles (ATVs), worth $1,000 and $500, respectively. Neil enters into a contract to buy “Mary’s ATV” for $750. Mary believes, in good faith, that she is selling the $500 ATV. Neil believes, in good faith, that he is buying the $1,000 ATV. In this situation

A Neil is entitled to the $1,000 ATV for $750.

B the contract is not enforceable.

C Neil must buy both ATVs for $1,500.

D Mary is entitled to $750 for the $500 ATV.

Question #6

In selling a 300-acre tract to Organic Farm, Peyton tells the buyer that the land “will be worth twice as much by next year.” This statement is not likely to support rescission of the contract because it is

A a misrepresentation.

B an opinion.

C a mistake.

D a material fact.

Question #7

Reliance on a misrepresentation is justified even if the innocent party knows the true facts.

A True

B False

Question #8

Only a mistake of value or quality makes a contract voidable.

A True

B False

Question #9

Ralph enters into a contract with Skye to buy her land based on her assertion that the land is open to development. After the sale, Ralph learns that only a small section of the land can be built on. A local law prohibits construction on the rest of the property. Ralph can

A avoid the contract due to fraud.

B avoid the contract due to undue influence.

C not avoid the contract because persons are assumed to know the law.

D avoid the contract due to a bilateral mistake.

Question #10

Orin, an employee of Plumbing LLC, makes a substantial mathematical mistake in totaling the estimated costs for a project for which Quality Built Inc. is seeking bids. Consequently, Plumbing’s bid is significantly low. Any contract with Quality Built that includes the mistake may be rescinded

A if Quality Built knew or should have known of the mistake.

B if Orin’s supervisor did not know of the mistake.

C if Plumbing knew or should have known of the mistake.

D under no circumstances.

Question #11

Ked, a real estate agent, assures Lida that a certain parcel of commercial property fronts on the most highly trafficked street in Metro City. Lida buys the property and then discovers that the street has no more traffic than any other in its vicinity. Lida may recover damages for

A the buyer’s mistake.

B the agent’s fraudulent misrepresentation.

C the city’s undue influence.

D none of the choices.

Question #12

Ray, an employee of Shipping Company, makes a substantial mathematical mistake in totaling estimated transportation costs for Tonnage Inc., which is seeking bids. Consequently, Shipping’s bid is substantially low. Any contract with Tonnage that includes the mistake may be rescinded

A if the mistake was made inadvertently and without gross negligence.

B under no circumstances.

C if the mistake was unilateral.

D if the mistake was intentional.

Question #13

An otherwise valid contract is enforceable even if the parties have not genuinely agreed to its terms.

A True

B False

Question #14

In entering into a contract with Marc for the sale of a cold storage warehouse, Nan fails to reveal the fact that the freezers do not consistently maintain a proper temperature. Most likely, this is fraudulent misrepresentation if

A Nan is not aware of the fact.

B the fact concerns the value or quality of the freezers.

C any of the choices.

D the fact is a serious defect known to Nan but not to Marc.

Question #15

Analytics LLC processes misinterpreted data furnished by Botch Services to propose a marketing plan for Clientele Inc. Analytics and Clientele are both ignorant of the mistaken data. Their contract can be rescinded on the basis of

A a bilateral mistake.

B a mistake of quality.

C none of the choices.

D a unilateral mistake.

Question #16

Undue influence can arise from a confidential relationship or a relationship based on trust.

A True

B False

Question #17

Consent to the terms of a contract is voluntary even if one of the parties is forced into the agreement.

A False

B True

Question #18

Denis sells a motorcycle to Elton without disclosing that the odometer, which reads 10,000 miles, was disconnected 100,000 miles ago. Denis is most likely liable for

A fraudulent misrepresentation.

B mistake.

C none of the choices.

D puffery.

Question #19

Car Lot’s salesperson Dirk offers to sell Espy, who is twenty years old, a car. Dirk intentionally misrepresents the vehicle’s use and repairs. In reliance, Espy buys the car. To prove fraud, Espy does not have to show that

A Espy is under twenty-one.

B Espy justifiably relied on Dirk’s misrepresentation.

C Dirk intentionally deceived Espy.

D Dirk misrepresented material facts.

Question #20

Hua applies to Inventory Corporation for a position as a coder. Hua has no training in coding. After Hua is hired, Inventory learns the truth. The employer can rescind the contract on the basis of

A fraudulent misrepresentation.

B mistake.

C none of the choices.

D undue influence.

Question #21

Voluntary consent to a contract is not lacking if one of the parties is mistaken about an important fact concerning the subject matter of the bargain.

A False

B True

Question #22

Even if the defects on a piece of property are obvious, the buyer can justifiably rely on the seller’s misrepresentations concerning those defects.

A False

B True

Question #23

Open Range agrees to sell Pinewood Ranch a remote parcel of land for $15,000. Both parties believe the land to be worthless, but beneath it is shale rock containing oil. A court would

A not rescind the contract.

B rescind the contract on the basis of a mistake of opinion.

C rescind the contract on the basis of a mistake of value.

D rescind the contract on the basis of a mistake of quality.

Question #24

The party on whom duress is exerted can choose to carry out the contract.

A False

B True

Question #25

Exaggeration is an element of fraud.

A True

B False

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