Question 1

When can a person rescind a contract? In order to rescind, what are the four steps one must undertake after returning what one received under a contract?

Accepted Answer

If a contract is voidable, one might ele...

Question 2

If an unilateral mistake regarding price results arise from misunderstanding an oral quotation of the price, the contract is invalid.

Accepted Answer

A) True 
 B)False

Question 3

A false statement made in the belief that it is true is known as innocent misrepresentation.

Accepted Answer

A) True 
 B)False

Question 4

A contract is void if parties to a contract are mutually mistaken about their expectations.

Accepted Answer

A) True 
 B)False

Question 5

Allen enters into a contract with Joe to sell his car. However by mistake, he undervalues his car. Though the actual value of the car is $6000, he sells it to Joe for $3000. During the purchase, Joe is aware of the actual value but does not communicate this fact to Allen. Which of the following is likely to be true in such a scenario?

Accepted Answer

A)   Allen is entitled to compensation through a court of law.
B)   Allen is entitled to cancel the contract because he was not aware of the actual value.
C)   Joe is entitled to keep the car because the contract is valid.
D)   Joe must pay the difference to Allen in order to validate the purchase.

Question 6

When one party wrongly threatens to injure another person physically in order to get agreement to a contract, economic duress occurs.

Accepted Answer

A) True 
 B)False

Question 7

Failure to disclose information when there is duty to do so is known as passive fraud.

Accepted Answer

A) True 
 B)False

Question 8

_____ is a means of destroying another's free will by one party obtaining consent to a contract as a result of a wrongful threat to do the other person or family members some harm.

Accepted Answer

A)   Passive fraud
B)   Duress
C)   Misrepresentation
D)   Undue Influence

Question 9

Mark, a civil engineer, entered into a contract with David. As per the contract, Mark agreed to design and build a house for David for a specified fee. Mark provided David with an estimation of the total cost and the contract was mutually agreed upon. However, during construction, when Mark increased the price stating a miscalculation on his part, David refused to pay the amount. This scenario is an example of a _____ mistake.

Accepted Answer

A)   mutual
B)   collective
C)   collateral
D)   unilateral D

Question 10

Fraud in the execution occurs when a defrauded party intends to sign a contract as a result of false statements made by the promisor.

Accepted Answer

A) True 
 B)False  False

Question 11

A false statement made in the belief that it is true is known as innocent misrepresentation.

Accepted Answer

A) True 
 B)False

Question 12

As a general rule, a unilateral mistake made at the time of contracting has an effect on the validity of a contract.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following statements is true of fraud in the inducement?

Accepted Answer

A)   It occurs when a party intends to make a contract based on a false statement of terms.
B)   It refers to a defrauded party not signing a contract if the nature of writing cannot be understood.
C)   It refers to a party forced to sign a contract under duress.
D)   It takes place when a party unintentionally signs a contract after being misguided by another.

Question 14

When one party wrongly threatens to injure another person physically in order to get agreement to a contract, economic duress occurs.

Accepted Answer

A) True 
 B)False

Question 15

Mistakes such as duress and undue influence render contracts void.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is true of undue influence?

Accepted Answer

A)   It occurs when one party threatens to cause physical harm to another.
B)   It refers to one party injuring another financially to influence him to enter into a contract.
C)   It takes place between people who are not known to each another.
D)   It refers to a person in a special relationship causing another's action contrary to free will.

Question 17

When a mistake occurs, the parties may specify a different outcome in their contract, irrespective of what the law provides.

Accepted Answer

A) True 
 B)False  True

Question 18

James orally entered into a contract to sell 100 tonnes of cotton to Bryan for a price of $1000 per ton. Both parties subsequently signed a written contract. However, the written contract mistakenly stated the price of cotton as $1100 per ton. While signing, Bryan failed to notice this mistake. Which of the following contract terms will govern in such a scenario?

Accepted Answer

A)   Both parties must consider the contract null because a mutual mistake has occurred.
B)   Bryan can hold James responsible for the error and cancel the contract.
C)   James can nullify the contract stating Bryan's mistake of not noticing the error.
D)   Both parties must carry on with the contract as agreed orally.

Question 19

Economic duress occurs when:

Accepted Answer

A)   one party offers a hard bargain and takes advantage of the other's urgent need to make a contract.
B)   a person agrees to a contract merely because of difficult financial circumstances that are not the fault of the other party.
C)   a person threatens to harm another person financially in order to get an agreement.
D)   one party makes a threat of violence and the other agrees to contract to avoid injury.

Question 20

Which of the following is true regarding parties who make mutual mistakes of law?

Accepted Answer

A)   The contract becomes null and nonbinding on the parties.
B)   One of the parties can annul the contract stating that it is a mistake of law.
C)   The parties are expected to have knowledge of the law when making the contract.
D)   Both parties can claim relief and compensation through a court of law.

Exam 9: Defective Agreements

When can a person rescind a contract? In order to rescind, what are the four steps one must undertake after returning what one received under a contract?

Correct Answer
verified
If a contract is voidable, one might ele...
View Answer

If an unilateral mistake regarding price results arise from misunderstanding an oral quotation of the price, the contract is invalid.

Correct Answer
verified

A false statement made in the belief that it is true is known as innocent misrepresentation.

Correct Answer
verified

A contract is void if parties to a contract are mutually mistaken about their expectations.

Correct Answer
verified

Correct Answer
verified

When one party wrongly threatens to injure another person physically in order to get agreement to a contract, economic duress occurs.

Correct Answer
verified

Failure to disclose information when there is duty to do so is known as passive fraud.

Correct Answer
verified

_____ is a means of destroying another's free will by one party obtaining consent to a contract as a result of a wrongful threat to do the other person or family members some harm.

Correct Answer
verified

Correct Answer
verified
D

Fraud in the execution occurs when a defrauded party intends to sign a contract as a result of false statements made by the promisor.

Correct Answer
verified
False

A false statement made in the belief that it is true is known as innocent misrepresentation.

Correct Answer
verified

As a general rule, a unilateral mistake made at the time of contracting has an effect on the validity of a contract.

Correct Answer
verified

Which of the following statements is true of fraud in the inducement?

Correct Answer
verified

When one party wrongly threatens to injure another person physically in order to get agreement to a contract, economic duress occurs.

Correct Answer
verified

Mistakes such as duress and undue influence render contracts void.

Correct Answer
verified

Which of the following is true of undue influence?

Correct Answer
verified

When a mistake occurs, the parties may specify a different outcome in their contract, irrespective of what the law provides.

Correct Answer
verified
True

Correct Answer
verified

Economic duress occurs when:

Correct Answer
verified

Which of the following is true regarding parties who make mutual mistakes of law?

Correct Answer
verified

Exam 9: Defective Agreements

When can a person rescind a contract? In order to rescind, what are the four steps one must undertake after returning what one received under a contract?

Correct AnswerverifiedIf a contract is voidable, one might ele...View AnswerShow Answer

If an unilateral mistake regarding price results arise from misunderstanding an oral quotation of the price, the contract is invalid.

Correct AnswerverifiedShow Answer

A false statement made in the belief that it is true is known as innocent misrepresentation.

Correct AnswerverifiedShow Answer

A contract is void if parties to a contract are mutually mistaken about their expectations.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When one party wrongly threatens to injure another person physically in order to get agreement to a contract, economic duress occurs.

Correct AnswerverifiedShow Answer

Failure to disclose information when there is duty to do so is known as passive fraud.

Correct AnswerverifiedShow Answer

_____ is a means of destroying another's free will by one party obtaining consent to a contract as a result of a wrongful threat to do the other person or family members some harm.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedD

Fraud in the execution occurs when a defrauded party intends to sign a contract as a result of false statements made by the promisor.

Correct AnswerverifiedFalse

A false statement made in the belief that it is true is known as innocent misrepresentation.

Correct AnswerverifiedShow Answer

As a general rule, a unilateral mistake made at the time of contracting has an effect on the validity of a contract.

Correct AnswerverifiedShow Answer

Which of the following statements is true of fraud in the inducement?

Correct AnswerverifiedShow Answer

When one party wrongly threatens to injure another person physically in order to get agreement to a contract, economic duress occurs.

Correct AnswerverifiedShow Answer

Mistakes such as duress and undue influence render contracts void.

Correct AnswerverifiedShow Answer

Which of the following is true of undue influence?

Correct AnswerverifiedShow Answer

When a mistake occurs, the parties may specify a different outcome in their contract, irrespective of what the law provides.

Correct AnswerverifiedTrue

Correct AnswerverifiedShow Answer

Economic duress occurs when:

Correct AnswerverifiedShow Answer

Which of the following is true regarding parties who make mutual mistakes of law?

Correct AnswerverifiedShow Answer

Correct Answer
verified
If a contract is voidable, one might ele...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
D

Correct Answer
verified
False

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
True

Correct Answer
verified

Correct Answer
verified

Correct Answer
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