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Jill and Karl contract for the sale of Jill's horse for $1,000. Unknown to either party, the horse has died. Karl is

a. entitled to another horse of equivalent value.
b. not required to pay due to the mutual mistake.
c. not required to pay due to the unilateral mistake.
d. required to pay because she assumed the risk the horse might die.

Owen, a famous chef, sells to Pat a restaurant that Owen closed years ago. Pat discovers in the restaurant a collection of Owen's recipes, which are considered valuable. In a suit to obtain the recipes, Owen will likely

a. not prevail because he should have known that the recipes were in the restaurant.
b. not prevail because the sale of a restaurant includes everything in it.
c. prevail because there was no mutual assent.
d. prevail because the sale of a restaurant includes nothing in it.

Local Investment Company and Midstate Properties, Inc., contract for the sale of a retail mall. A mutual mistake of fact will make it possible for ei¬ther party to rescind the contract

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Gert contracts to sell two tracts of land to Hank. Both parties believe that the two tracts are adjacent, but in fact they are not. Gert is still willing to sell the land, but under these circumstances the deal would adversely affect Hank.Refer to Fact Pattern 14-B1. The parties' belief about the adjacency of the property is

a. a bilateral mistake.
b. a fraudulent misrepresentation.
c. a unilateral mistake.
d. unconscionable.

Dina, an employee of Eagle Industries, is injured in a work-related accident. Based on the diagnosis of Frank, a doctor, Dina accepts $50,000 from Eagle and waives the right to future claims. Frank's diagnosis later proves to have been wrong.Refer to Fact Pattern 14-A1. According to the reasoning of the court in Case 14.1, Roberts v. Century Contractors, Inc., Frank's misdiagnosis is, in terms of its impact on Dina's agreement with Eagle,

a. a mutual mistake of fact.
b. a unilateral mistake of fact.
c. fraudulent misrepresentation.
d. nonfraudulent misrepresentation.

Gert contracts to sell two tracts of land to Hank. Both parties believe that the two tracts are adjacent, but in fact they are not. Gert is still willing to sell the land, but under these circumstances the deal would adversely affect Hank.Refer to Fact Pattern 14-B1. Because of the parties' belief about the adjacency of the property, their contract is

a. unavoidable.
b. unconscionable.
c. unenforceable.
d. voidable.

Dina, an employee of Eagle Industries, is injured in a work-related accident. Based on the diagnosis of Frank, a doctor, Dina accepts $50,000 from Eagle and waives the right to future claims. Frank's diagnosis later proves to have been wrong.Refer to Fact Pattern 14-A1. Dina may, according to the deci¬sion in Case 14.1, Roberts v. Century Contractors, Inc.,

a. obtain damages from Eagle for nonfraudulent misrepresentation.
b. obtain damages from Frank for fraudulent misrepresentation.
c. recover nothing because Dina waived the right to future claims.
d. set aside the settlement with Eagle due to a mistake of fact.

Hillside Homes, Inc., and Ideal Builders, Inc., enter into a construction contract that includes six pages of detailed calculations. Later Hillside, whose project manager compiled the figures, discovers that some numbers were multiplied incorrectly, but Ideal refuses to make changes. A court would most likely

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.

Moore Properties, Inc., offers in writing to sell to New Development Corporation (NDC) a certain half-acre of land for "$112,000." After New Development signs the offer in acceptance and returns it, Moore discovers that the price should have been stated as "$121,000."Refer to Fact Pattern 14-A2. Moore's misstatement of the price is

a. a bilateral mistake.
b. a fraudulent misrepresentation.
c. a unilateral mistake.
d. unconscionable.

At an auction for the first time, Max bids on an object, believing that the auctioneer requested an amount less than the price actually asked. Max is

a. liable on the bid.
b. not liable on the bid because Max misunderstood the auctioneer.
c. not liable on the bid because the auctioneer misstated the price.
d. not liable on the bid because the object is probably overpriced.

Moore Properties, Inc., offers in writing to sell to New Development Corporation (NDC) a certain half-acre of land for "$112,000." After New Development signs the offer in acceptance and returns it, Moore discovers that the price should have been stated as "$121,000."Refer to Fact Pattern 14-A2. The effect of Moore's misstatement of the price will most likely fall on

a. Moore and NDC, who must split the difference.
b. Moore only.
c. NDC only.
d. neither Moore nor NDC.

Harold believes his old baseball bat has little value, but Murray is con¬vinced it is a valu¬able collector's item. Harold sells it to Murray for $100 before learning it is worth $1,000. The contract

a. may be rescinded because a mutual mistake was made.

b. may serve as the basis for a court order to Murray to return the bat.
c. may be rescinded because Murray used superior knowledge about the bat to take advantage of Harold.
d. will not be canceled because the mistake relates to the value of the item.

Great City and Highway Construction Company (HCC) enter into a construction contract that includes six pages of detailed estimates. Later Great City, whose engineer compiled the figures, discovers that some numbers were added incorrectly, but HCC refuses to make changes. A court would most likely

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.

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

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.

May is a stockbroker. Due to May's statements, Nora believes that the price of OK Goods, Inc. (OKGI), a widely traded stock, is going to in-crease sub¬stantially. Nora buys 500 shares of OKGI at $10 per share, but the price soon drops to $2. Nora can successfully recover

a. nothing.
b. the amount of the purchase price.
c. the amount of the purchase price plus the expected increase.
d. the amount of the purchase price plus the unexpected decrease.

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

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.

Used Car Lot's salesperson Vic offers to sell Will, who is twenty years of age, a car about which Vic intentionally misrepresents several material facts. In reliance on the misrepresentations, Will buys the car. To prove fraud in this transaction, Will would not have to show that

a. Vic intentionally deceived Will.
b. Vic misrepresented several material facts.
c. Will is under twenty-one years of age.
d. Will justifiably relied on Vic's misrepresentations.

Rally offers to sell Sophie, who is seventeen years of age, a car about which Rally intentionally misrepresents several material facts. In reliance on the misrepresentations, Sophie buys the car. To prove fraud in this transaction, Sophie would have to show that

a. Rally intentionally deceived Sophie.
b. Rally made statements that were obviously exaggerated.
c. Sophie does not know anything about cars.
d. Sophie is under eighteen years of age.

Gina induces Hu to enter into a contract for the purchase of a condominium about which Gina knowingly misrepresents a number of material features. When Hu discovers the truth, Hu can

a. not rescind the contract.
b. rescind the contract on the basis of fraud.
c. rescind the contract on the basis of mistake.
d. rescind the contract on the basis of undue influence.

Joy induces Kelly to enter into a contract for the purchase of a condominium about which Joy knowingly misrepresents a number of material features. When Kelly discovers the truth, Kelly can

a. enforce the contract and seek damages.
b. enforce the contract but not seek damages.
c. neither enforce the contract nor seek damages.
d. seek damages but not enforce the contract.

In selling software to Payroll Services Corporation, Ray tells Payroll's purchas¬ing agent that the software is "almost human." This is

a. fraud.
b. duress.
c. puffery.
d. undue influence.

Kurt persuades Leo to buy his bicycle by telling Leo that the bike rides "like the wind." Kurt's statement is

a. duress.
b. fraud.
c. puffery.
d. undue influence.

Olin convinces Pia, who has no artistic ability, that Pia has considerable talent and induces Pia to pay Olin $10,000 for art lessons. When Pia realizes the truth, she files a suit against Olin. Pia is most likely to recover on the basis of

a. fraud.
b. mistake.
c. undue influence.
d. none of the choices.

Yvon convinces Zack, who has no athletic ability, that Zack has considerable talent and induces Zack to pay Yvon $10,000 for golf lessons. When Zack realizes the truth, he files a suit against Yvon. Zack is most likely to recover on the basis of

a. duress.
b. misrepresentation.
c. unconscionability.
d. none of the choices.

Don, a salesperson for Excel Autos, promises Fern that a certain car will give her a "smooth ride." Don offers a test drive, which Fern de¬clines. She buys the car but soon realizes that its suspension is in poor condi¬tion. Fern

a. can rescind the contract on the ground of fraud.
b. can rescind the contract on the ground of misrepresentation.
c. can rescind the contract on the ground of mistake.
d. was not defrauded.

Roc buys a farm from Steve, who claims that it would be a prime site for a housing subdivision. Roc later learns that the law does not permit the land to be used for housing. Roc may

a. not rescind the contract.
b. rescind the contract only if Roc did not know the law before the deal.
c. rescind the contract only if Steve knew about the law before the deal.
d. rescind the contract only if the law is not common knowledge.

Bret is convicted of arson for burning down his warehouse to collect the in¬surance. On an application for insurance from Cover-All Insurance Company on a new building, in answer to a question about prior convictions, Bret does not disclose his convic¬tion. This makes the contract

a. binding because the omission is immaterial to Cover-All's decision to issue coverage.
b. binding due to Cover-All's failure to discover Bret's conviction.
c. voidable by Bret because the omission is immaterial to Cover-All's decision to issue coverage.
d. voidable by Cover-All because the omission is material to its decision to issue coverage.

Ben sells a sport utility vehicle to Cody without disclosing that the odome¬ter, which reads 40,000 miles, was disconnected 80,000 miles ago. Ben is liable for

a. duress.
b. fraud.
c. puffery.
d. undue influence.

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

a. a unilateral mistake.
b. duress.
c. fraud.
d. innocent misrepresentation.

Dale files a suit against Eve, alleging her fraud in entering into a con¬tract with him. Proof of an injury is required

a. to recover damages.
b. to rescind the contract.
c. to undo Eve's influence.
d. under no circumstances.

Allen, who is Beth's guardian, convinces her to buy a certain parcel of land from Chris at a greatly inflated price. Allen may be liable for

a. duress.
b. fraud.
c. puffery.
d. undue influence.

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

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.

Flo enters into a contract under Gail's threats. Later, Flo refuses to perform, claiming that she acted under duress.
. Refer to Fact Pattern 14-A3. Flo sues to rescind the contract. Gail claims that duress is a defense to enforcement of a contract, not a ground for re¬scission. The court will probably rule in favor of

a. Flo only.
b. Flo and Gail.
c. Flo or Gail, but not both.
d. Gail only.

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. 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.

Flo enters into a contract under Gail's threats. Later, Flo refuses to perform, claiming that she acted under duress.

Refer to Fact Pattern 14-A3. Gail sues to enforce the contract. To be guilty of duress, Gail must have threatened

a. a civil suit.
b. a lost opportunity.
c. a social snubbing.
d. a wrongful act.

Mary induces Nick to sign a contract byplacing a gun to Nick's head. The contract is void

a. only if the contract has an illegal purpose.
b. only if the terms are unfair to Nick.
c. under any circumstances.
d. under no circumstances.

Gary threatens physical harm to force Hugh to sell his business, Imported Goods, Inc., to Gary for a below-market price. This is

a. duress.
b. fraud.
c. puffery.
d. undue influence.

Pete, the owner of Quality Orchards, contracts to sell fruit to Ripe Produce, Inc. When Pete refuses to per¬form, Ripe Produce files a suit to enforce the contract.
Refer to Fact Pattern 14-B3. To defend successfully on the ground of un¬con¬scionability, Pete must show that enforcement of the contract would be

a. economically meaningless.
b. legally worthless.
c. manifestly unfair or oppressive.
d. undeniably valuable.

Sam uses duress to force Tanya to agree to pay him for protecting her re¬tail store against the vandalism and destruction. Tanya may

a. avoid the contract or choose to carry it out.

b. do nothing once she has agreed to pay.
c. recover from her insurer for a failure to direct her "protection."
d. recover from the local police for a failure to protect her "direction."

Refer to Fact Pattern 14-B3. If Pete and Ripe Produce are in a state that does not recognize the doctrine of unconscionability, to defend suc¬cess¬fully against enforce¬ment of the contract on similar grounds, Pete might rely on traditional notions of

a. fraud.
b. materiality.
c. mistake.
d. unconscionability.

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