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BLAW Test 2 TEST BANK
T/f On Tuesday morning John sends a letter to Arlene rejecting her offer, but later the same day John changes his mind and sends a letter of acceptance to Arlene. The letter of acceptance will be effective only if it is received by Arlene before she receives the rejection. - ✔True T/f An offer is effective as soon as it is dispatched. - ✔False T/f An offer must be communicated to the offeree in order for the offer to be effective - ✔True T/f An advertisement is usually an offer to sell. - ✔False T/F A valid offer may be in the form of an act for a promise, which is an offer to enter into an inverted unilateral contract - ✔true T/f Contract law generally places more importance on the intent of the parties to form a contract than on the inclusion of certain terms in the contract. - ✔True T/f The common law "mirror image" rule applies to an offer and the acceptance of that offer in a contract for the sale of goods. - ✔False T/f If no time limit is stated, an offer will not terminate until both parties agree. - ✔false (T/F) If Bill tells Sara that he will give her two days to decide if she wants to buy his car, he cannot sell it to anyone else during that time. - ✔False T/f Commercial reasonableness is a standard determined in terms of the business judgment of reasonable persons familiar with the practices customary in the type of transaction involved - ✔True (T/F) Ron offers to sell Pete his stamp collection. Pete gives Ron $10 to induce him to keep his offer open for a week. If Ron decides on day four of the week that he really does not want to sell to Pete, he can revoke his offer without fear of a breach of contract lawsuit being filed against him - ✔false T/F In general, an acceptance is effective upon dispatch - ✔True T/F George offered to paint Catherine's barn for $4,000. Catherine said she would accept the offer if George would paint the woodshed, too. At this point, they have made a valid and enforceable contract - ✔False (T/F) Under the UCC, an acceptance must always be identical to an offer for a valid contract to be formed - ✔false
T/F a contract exists when an offer has been accepted - ✔True (T/F) Both the Code and the Restatement provide that an authorized means of accepting an offer is any reasonable means of communication - ✔true (T/F) If the offer specifies it MUST be accepted by telegram, a letter will not be a valid means of acceptance - ✔True (T/F) If an offer states that a reply must be received by a certain date, the contract is formed at the time the offeree sends or dispatches the acceptance - ✔False T/F silence can never be acceptance - ✔False (T/F) An auctioneer is the offeror and each bid is a counteroffer until a final bid is accepted - ✔False (T/F) When a bid is made at an auction, it can be revoked if the auctioneer has not yet accepted the bid because the auctioneer has the power of acceptance. - ✔True T/F the person to whom an offer is made is an offeree - ✔True T/F there is no necessity to distinguish language which constitutes an offer from that which merely solicits or invites offers - ✔False T/F The Code's firm offer rule applies only to offers in writing that are made by a merchant offeror - ✔True T/F In order for an offer to end by lapse of time, the offeror must specify the time within which the offer is to be accepted - ✔False T/f The law applies a subjective standard of intent in determining whether there was the requisite intent to enter into a contract - ✔False T/f an offer must be in one particular form to have legal effect - ✔False T/f The UCC and the Restatement make no provision for supplying terms omitted by the parties' contract - ✔False T/f In an output contract, the seller can operate a factory on a 24-hour-a-day schedule and insist that the buyer take all of the output when that buyer had operated only eight hours a day at the time the contract was made and the buyer had knowledge of the eight-hour-a-day operating schedule. - ✔False (T/F) Death or insanity of either the offeror or the offeree ordinarily terminates the offer.
d. Elmer is prohibited from revoking his offer to Fred under the doctrine of promissory estoppel. - ✔Elmer can revoke his offer at any time before acceptance, because there is no consideration to keep the offer open If there is no time specified for the acceptance of an offer, when does the offer terminate? a. After 24 hours b. After 48 hours c. After two weeks d. After a reasonable period of time - ✔after a reasonable period of time Albert read Gem City's ad in the local newspaper advertising a one-quarter carat diamond ring for $89. Albert rushed to the store to buy the ring only to be told by the salesperson that the ad was a misprint and the price should have been $289. Albert gave the salesperson $89 plus sales tax and demanded the ring. a. The ad is a firm offer by the merchant, and the ring must be sold for $89. b. The ad is a contract and the store must abide by terms stated in the contract. c. The store must accept the price stated in the ad, but only if Albert has a copy of the ad with him. d. Albert is merely making an offer to Gem City to buy the ring for $89 plus sales tax. - ✔Albert is merely making an offer to Gem city to buy the ring for $89 plus sales tax An offer under Article 2 of the UCC that is irrevocable even though no consideration is given to keep it open is known as a(n): a. option. b. firm offer. c. requirements contract. d. output contract. - ✔B. firm offer Elvis makes an offer to Miguel, but before Miguel can accept, the state supreme court decides a case that makes the offer illegal. What is the effect of the court decision on the offer? a. The court decision automatically terminates the offer. b. The court decision has no effect on the offer. c. The court decision acts as a condition on the offer. d. The court decision acts as a rejection of the offer by the offeree. - ✔A. the court decision automatically terminates the offer Jesse makes an offer to Ike, and Ike accepts; then the state legislature passes a law that makes performance of the contract illegal. What is the effect of the new statute on the contract? a. The contract is severed; any portions that are legal must still be performed and any portions that have been made illegal must not be performed. b. The statute has no effect on the contract. c. The statute acts as a condition on the contract. d. The statute discharges the obligations of both parties under the contract. - ✔D. the statue discharges the obligations of both parties under the contract
Maxine offered to sell her video camera to Tom for $200 and also stated to Tom, "I will give you two weeks to accept my offer." One week later Tom learned that Maxine had sold the video camera to Cindy. a. Maxine has revoked her offer to Tom. b. Maxine's offer is a firm offer and she must sell Tom a video camera for $200. c. Maxine must get the camera back from Cindy if Tom accepts within two weeks. d. Both (b) and (c) are appropriate alternatives in this case. - ✔A. maxine has revoked her offer to Tom The Rogers family has always wanted to buy the beautiful house at the top of the hill. The owners of the house, the Thompsons, decided to sell and called Mr. Rogers. Before he could get back in touch with Mr. Thompson, Mr. Rogers suffered a heart attack and died. Mr. Rogers' adult daughter, to whom the Thompsons had not spoken, still wants the house. A. She may not accept since the offer is terminated. b. She may not accept because she does not have the capacity. c. She may accept since the contract offer is assignable. d. She may accept since the offer cannot be revoked without notice. - ✔A. she may not accept since the offer is terminated In general, which of the following will not terminate an offer? a. The death of the offeree b. The death of the offeror c. An inquiry by the offeree as to size or materials d. An acceptance that adds a material term - ✔C. an inquiry by the offer as to size or materials Gary mails an offer to Brian on June 15. Brian receives the offer on June 16. Gary mails a revocation of the offer on June 17. Brian mails a letter of acceptance on June 18 and Gary receives the acceptance on June 20. Brian receives the revocation on June 19. Was a contract formed? A. Yes, on June 16 b. Yes, on June 18 c. Yes, on June 20 d. No, the offer was revoked before acceptance - ✔B. yes on June 18 Alice offers to sell her computer, monitor, and printer to Bradley for $300. Bradley says he will accept provided that Alice includes her word processing software. What is the status of their discussions? a. There is a valid contract for the computer, the monitor, the printer, and the software. b. There is no contract, because Bradley has made a counteroffer. c. There is no contract, because the time for delivery has not been decided. d. There is no contract, because the offer has been revoked by the offeror. - ✔B. there is no contract, because bradley has made a counteroffer A ____ is an offeree's refusal to accept an offer. A. revocation. b. counteroffer c. rejection d. statutory irrevocability -
c. a rejection. d. an invitation. - ✔B. a counteroffer Destruction of the subject matter has what effect on the offer? a. The offer is terminated. b. The offer is delayed until additional subject matter can be located. c. This creates an impossibility of fact that does not terminate the offer. d. The offer is merely delayed under the "Hardship Rule." - ✔A. the offer is terminated To be effective, notice of revocation of an offer: a. must be communicated directly to the offeree before the offeree has accepted. b. may be communicated indirectly to the offeree through a third person. c. must be dispatched before the offeree accepts; when notice actually reaches the offeree is not important. d. is not addressed in the Restatement. - ✔B. May be communicated indirectly to the offer through a third person Assume an offeree mails a rejection to the offeror on November 1. This rejection arrives at the offeror's place of business on November 5. In the meantime, on November 4, the offeree sends the offeror an acceptance that arrives November 6. Which of the following statements correctly describes the situation? a. There was no contract because when an acceptance follows a prior rejection, the first communication to be received by the offeror is the effective one. b. There was a contract since the acceptance was mailed prior to the time the rejection was received. c. There was no contract because the rejection was mailed first. d. There was no contract because the acceptance was mailed more than three days subsequent to the rejection. - ✔A. There was no contract because when an acceptance follows a prior rejection, the first communication to be received by the offeror is the effective one Under the common law, the ____ must be the mirror image of the ____. a. contract, consideration b. contract, offer c. offer, acceptance d. acceptance, offer - ✔D. acceptance, offer James offers to sell four acres of land to Jennifer for $8,000 and further offers to keep the offer open for one month if Jennifer will pay him $100 for the privilege. Jennifer pays James $100. Which statement describes the payment of $100? a. An implied in fact contract has been formed. b. A unilateral contract has been formed. c. This is a formal contract. d. This is an option contract. - ✔D. This is an option contract Shirley hears about a reward being offered by the local television station for information leading to the arrest and conviction of a local rapist. She supplies the requested information, and the suspect is then arrested and convicted.
a. Shirley cannot collect the money unless the offer was specifically made to her by the station. b. The offer by the television station was an offer made to the general public to enter into a unilateral contract, which offer Shirley has accepted. c. Because Shirley failed to notify the station of her intention to supply the information before actually doing so, she has not accepted their offer. d. Shirley was just doing her duty as a citizen and has no right to the payment of any money. - ✔B. The offer by the television station was an offer made to the general public to enter into a unilateral contract, which offer Shirley has accepted The way parties usually show mutual assent is by: a. an offer by words or conduct and an acceptance by words or conduct. b. a proposal in words and an acceptance in words. c. an act exchanged for an act. d. an offer and a counteroffer. - ✔A. an offer by words or conduct and an acceptance by words or conduct Leonard offers to sell his diamond ring to Emily. Diane overhears the offer and says, "I accept the offer" a. Diane cannot accept the offer, because it wasn't made to her. b. This is a valid acceptance. c. The offer has not been communicated to the offeree. d. This is an invitation seeking offers and not an offer. - ✔A. Diane cannot accept the offer, because it wasn't made to her Which is an irrevocable offer? a. A bid to construct a bridge for the city b. An offer to buy stock in the ABC Corporation once it is formed c. A unilateral offer to pay John $30 to mow your lawn at the point that he has completed half the job and indicates he wishes to finish d. All of the above. - ✔D. all of the above If an offer requires acceptance by mail and the offeree faxes acceptance: a. there is no contract b. there is a contract if the acceptance is actually received within the time the authorized means would have arrived. c. under the Restatement, if the acceptance is received within the time the authorized means would have arrived, the acceptance is effective when sent. d. Both (b) and (c) are correct. - ✔D. Both b and c are correct The UCC Battle of the Forms rule: a. changes the mirror image rule. b. may yield different results depending on whether the parties are merchants. c. may result in formation of a contract different from the terms of the offer. d. All of the above. - ✔D. all of the above
Which of the following would most probably be considered a valid offer? a. "Would you like to buy this?" b. "I'd give $50 for a cold glass of water." c. "Special sale on VCR's today - $200 each." d. "$100 reward for return of lost white-gold, men's wedding band inscribed with initials 'TEA' to Tony Adams, 350 Main Street, Peoria." - ✔D. "$100 reward for return of lost white-gold, men's wedding band inscribed with the initials 'TEA' to Tony Adams, 350 Main Street, Peoria." The case in which the court held that a newspaper advertisement was an offer because it contained a promise of performance in definite terms in return for a requested act was: a. Catamount Slate Products, Inc. v. Sheldon. b. Newman v. Schiff. c. Lefkowitz v. Great Minneapolis Surplus Store, Inc. d. Osprey L.L.C. v. Kelly-Moore Paint Co., Inc. - ✔C. Lefkowitz v Great Minneapolis Surplus Store, Inc. Which of the following would most likely be a merchant with respect to the goods in question under the UCC definition? a. Amy is an authorized IBM computer dealer. b. Brian employs two salesmen to sell his homemade furniture. c. Clarence has a store in which he sells used lawn mowers. d. All of the above would be merchants. e. None of the above would be merchants. - ✔D. all of the above would be merchants Marilyn read an ad in the school newspaper offering a thousand dollar swimming scholarship to anyone who could swim 500 laps in the school pool. Marilyn called the advertiser and began swimming. She has reached lap number 460; she feels great and is sure she can make it all the way. a. The advertiser may revoke the offer since there has not yet been an acceptance. b. The advertiser may not revoke the offer since Marilyn has already accepted it. c. The advertiser must permit Marilyn the opportunity to finish her attempt to swim the 500 laps, or pay damages if he interferes with the completion of the laps. d. The advertiser must pay Marilyn $920, because she has performed 92% of the offer.
- ✔C. the advertiser must permit Marilyn the opportunity to finish her attempt to swim the 500 laps, or pay damages if he interferes with the completion of the laps Hannah, as a joke, offers to sell her violin to Mike. Her statement would have legal effect if: a. the intended jest is so successful that Mike as a reasonable person under the circumstances believes the joke is an offer and he accepts. b. Hannah's intent, determined subjectively, is to enter a contract. c. Hannah's intent, determined objectively, is not to enter a contract. d. Mike did not, but should have realized that Hannah was not serious. e. Both (c) and (d). - ✔a. the intended jest is so successful that Mike as a reasonable person under the circumstances believes the joke is an offer and he accepts.
Bart sends Carla an offer by express mail. Carla receives it at 10a.m on Tuesday. At 11 a.m. on Tuesday, Carla delivers an acceptance to Federal Express, but due to an error, the letter is not sent out by the company until Wednesday at 8 a.m. At what time does the law consider the acceptance to be effective? a. At 10 a.m. on Tuesday b. At 11 a.m. on Tuesday c. At 8 a.m. on Wednesday d. At the time Bart receives the letter - ✔B. at 11 a.m. on Tuesday In order to form a contract, the parties must: a. Manifest their agreement subjectively b. manifest their agreement objectively. c. indicate solely through written word their intent. d. create a formal document called a contract. - ✔b. manifest their agreement objectively An offer need not take any particular form to have legal validity. To be effective, however, it must: a. be spoken directly to the offeree. b. always contain the price of the product or service offered. c. always contain the place of delivery. d. be communicated to the offeree. - ✔D. be communicated to the offeree For an offer to be valid, which of the following elements must be present? a. The offeree must have knowledge of the offer. b. The offeree must have first-hand knowledge of the offer. c. The offer must be communicated by the offeror. d. The offer must be communicated by words. - ✔A. the offeree must have knowledge of the offer. T/F Marjorie has been cared for by her family physician for 35 years. She decides to assume the mortgage on his new clinic. The contract is automatically invalid because of undue influence. - ✔False T/F At the marriage of her daughter, Lorna is given papers to sign which the catering company says are the invoices for the food, service, and decorations. Underneath the invoices are a carbon and a contract of sale for a portion of the failing catering business. Lorna signs the papers; her signature is transferred to the sales contract. This is a void contract because it was entered by fraud in the execution. - ✔True T/F Pat told her friends that her car got 35 miles to the gallon in the city when in reality it only got 20 miles per gallon. When Pat decides to sell and one these friends decides to buy the car, Pat is under no duty to tell the correct figure unless asked. - ✔False T/F If an agreement is not voluntary and knowing, it will be either void or voidable. - ✔true T/F Physical compulsion and improper threats are the two basic types of duress. - ✔True
T/f Scienter is the element of fraud that requires that the person who makes the misrepresentation knows that it is false or has reckless indifference as to its truthfulness
- ✔True T/f The trustee of a trust does not owe a fiduciary duty to the beneficiary of that trust - ✔False (T/F) Al owns a farm that he believes is worth $150,000. Betty knows that there is oil under the farm and offers Al $160,000 for it. Al accepts and sells the farm to Betty. Al later realizes that the land was worth more than $160,000. Al can have the contract avoided based upon fraud. - ✔False T/f Al owns a farm that he believes is worth $150,000. Betty knows that there is oil under the farm and offers Al $160,000 for it. Al is suspicious and asks her why she wants to buy the place. She says she would like to live in the country. Al then asks her if she thinks there might be valuable minerals under the land. Betty laughs and says she doubts that very much, so Al sells her the farm for $160,000. Al later realizes that the land was worth more than he was paid. Betty's statement to Al was a misrepresentation requisite for fraud. - ✔True (T/F) The most uncommon type of duress involves the use of economic and social coercion - ✔False (T/F) To obtain relief for negligent or innocent misrepresentation all the remaining elements of fraud must be present and the misrepresentation must be material - ✔True T/f for a misrepresentation to be fraud in the inducement, it need not be material - ✔false T/f An arm's-length transaction is one in which the parties owe each other special duties
- ✔False (T/F) The test for duress is objective and the act must be classified as a tort or a crime in order to be wrongful - ✔False (T/F) An act that is contrary to public policy or is morally reprehensible may constitute duress. - ✔True (T/F) If the act or threat would affect a person of average strength and intelligence, then and only then will the act constitute duress. - ✔False T/f If a confidential relationship exists between parties to a contract, the law presumes that undue influence exists if it appears that the dominant party has gained at the other party's expense, but the presumption can be rebutted by evidence that it was not exercised. - ✔True
T/f A seller's promise to service a sewing machine free for the next 90 days when she has no intention of doing so is actionable as a false representation of a fact if the other elements of fraud are present. - ✔True T/f there are two distinct types of fraud - ✔True (T/F) For a misrepresentation to be material, it must be likely to induce a reasonable person to manifest assent or the maker must know that it would be likely to induce the recipient to do so. - ✔True T/f A basic element of fraud is a false representation or misrepresentation - ✔True (T/F) Nonfraudulent representation is made without scienter. - ✔True A collection agency threatened to sue Martha for the unpaid hospital bills from her heart operation. She signed a promissory note at a high but not illegal rate of interest. What result? a. It is valid because she signed it. b. It is valid because the threat to bring a civil suit to collect money owed is permissible. c. It is invalid because she signed under duress. d. It is invalid because the agency put her under undue pressure. - ✔B. it is valid because the threat to bring a civil suit to collect money owed is permissible Tommy's parents died in a plane crash and he went to live with his guardian, Aunt Rose. Rose had a very small house and did not have a separate bedroom and bath for 12- year-old Tommy. She and Tommy decided to use some of his inheritance to pay for an addition to the house. He had some shares of stock transferred into Rose's name so that she could sell them when the money was due to be paid. The stock transfers are: a. presumed voidable unless Rose can show no unfair advantage was taken. b. presumed valid unless it can be proven that Tommy was taken advantage of. c. null and void because of undue influence. d. presumed void because of duress. - ✔A. presumed voidable unless Rose can show no unfair advantage was taken Eliza was an antique expert. She went to a tea party at Grandma Jones' house and saw a magnificent Queen Anne table out on the back porch. She asked Grandma about it and was told it was in the way so they were going to store it in the barn. Eliza offered to buy it from her for $200. The next week, Grandma saw it in Eliza's store on sale for $3,000. Which of the following is true? a. She can get it back because of fraudulent concealment of the value. b. She can get the true value, because it would not be fair otherwise. c. She cannot rescind the contract because Eliza did not have a duty to tell her the value of the table. d. She cannot rescind the contract because she did not rely on Eliza to give her a fair price. - ✔C. She cannot rescind the contract because Eliza did not have a duty to tell her the value of the table.
a. duress. b. undue influence. c. fraud in the inducement. d. fraud in the execution. - ✔C. Fraud in the inducement Tom tries to sell his classic car to Victoria for $12,000. Tom tells Victoria, "I paid $12,000 for the car in 1978 and it's worth twice that today." Tom really paid $8,000 for the car in 1978. If Victoria buys the car, basing her decision on Tom's statement, which of the following correctly states the situation? a. Tom's statements amount to puffing only. b. Tom's statements provide grounds to set the contract aside. c. Tom's statements are actionable only if intentional. d. Tom's statements amount to fraud in the execution. - ✔B. Tom's statements provide grounds to set the contract aside Contracts induced by threats of ____ are voidable, regardless of whether the coerced party has committed an unlawful act. a. civil prosecution b. criminal prosecution c. tortious conduct d. physical force - ✔B. Criminal Prosecution A fiduciary is a: a. person in a subservient position. b. person who owes a duty of trust, confidence, and loyalty to another. c. form of formal conduct. d. person of equal power and control. - ✔B. person who owes a duty of trust, confidence, and loyalty to another Kyle wants to buy a six-passenger car. The salesperson tells him that the two-seat sports car Kyle sees on the car lot would be just perfect for six people. Kyle test drives the car and then buys it. a. Kyle has a valid cause of action for fraud. b. Kyle was not justified in relying upon the salesperson's representation that the car would seat six people. c. The element of scienter is missing in this fact situation. d. The salesperson is a fiduciary. - ✔b. Kyle was not justified in relying upon the salesperson's representation that the car would seat six people. When both parties misunderstand the same set of facts relating to a basic assumption on which a contract is made, it is termed: a. rescissionary mistake. b. unilateral mistake. c. mistake of law. d. mutual mistake. - ✔D. Mutual mistake
An intentional misrepresentation of a material fact made with knowledge of the falsity and intention to deceive and which a party justifiably relies upon to his detriment is known as: a. duress. b. fraud in the execution. c. fraud in the inducement. d. non-fraudulent misrepresentation. - ✔C. fraud in the inducement A party to a contract may be able to avoid the contract if: a. there is a mutual mistake, and the party undertook to bear the risk by conscious allocation. b. there is a unilateral mistake, and the party undertook to bear the risk by conscious ignorance. c. there was a mistake and the mistaken party was at fault in not discovering the problem before making the contract. d. None of the above. - ✔c. there was a mistake and the mistaken party was at fault in not discovering the problem before making the contract Which of the following is NOT an element of fraud? a. Material misrepresentation b. Competent parties c. Knowledge of falsity d. Justifiable reliance - ✔B. competent parties If untrue, which of the following would probably be considered a misrepresentation of a material fact? a. "This is the one that I think is the best buy." b. "This is the best computer on the market." c. "This car has new brakes." d. "These tires will wear like iron." - ✔C. "this car has new brakes." A misrepresentation is material if: a. it would likely induce a reasonable person to enter into a transaction. b. the maker knows it would likely induce the other party to enter into the transaction. c. it is made knowingly. d. Both (a) and (b). - ✔D. both a and b Stewart entered into a contract with Will to have Will build a 10-unit apartment complex on Elm Street in Randolph County. Unknown to both parties, this land had recently been rezoned and only single-unit dwellings can be constructed. a. This is a mistake of law. b. This is a mutual mistake of fact. c. Stewart is obligated to buy land elsewhere and have the complex constructed on property zoned for apartments. d. Will is liable to Stewart since Will is a contractor. - ✔A. this is a mistake of law
a. Alex must perform for the agreed upon price because he has made a unilateral mistake b. The city was aware of or should have been aware of Alex's mistake. When it accepted the bid with knowledge of Alex's mistake, the city sought to take an unconscionable advantage of Alex's error. c. This case is an example of a palpable unilateral mistake. d. Both (b) and (c). - ✔D. both b and c Ralph sold a motel to Steve by stating that he had paid $250,000 for it and that his net average annual profit from the business has been $40,000. In reality he paid $100, for the motel and has earned a net average annual profit of only $30,000. Steve made no attempt to verify the statements until after the transaction was completed. a. Ralph has committed fraudulent misrepresentation. b. Steve is bound by the contract, because he failed to verify the statements which were made to him. c. The contract is voidable at Steve's option. d. Both (a) and (c). - ✔D. both a and c Which of the following would be considered to be a misrepresentation of a material fact for purposes of establishing fraud in the inducement? a. A statement of judgment of value, such as "This is the best car in town for the money." b. "This style of jacket is going to be the most popular style next year." c. "This car has a new radiator." d. "In my opinion, this is the best buy for the money." - ✔C. "this car has a new radiator." The State of Florida enters into a contract with Treasure Salvors governing the salvage of a Spanish galleon that sunk in the 1600's. Under the terms of the contract, the salvagers agree to relinquish 25% of the items recovered to the State of Florida in return for the right to salvage on state lands. At the time the parties enter into the contract, they both believe that the seabed where the ship lies is state land. Subsequently, the United States Supreme Court holds that the continental shelf on which the ship rests has never been owned by Florida. The salvagers sue to rescind the contract. a. The contract cannot be rescinded. b. The parties made a mutual mistake for which the contract should be avoided. c. There is a mutual mistake, but because it is not material, the court should enforce the contract. d. The United States government will automatically step into the shoes of the State of Florida to make the contra - ✔B. The parties made a mutual mistake for which the contract should be avoided. Which of the following need NOT be proved in order to establish the defense of economic duress? a. That one side involuntarily accepted the terms of another. b. That circumstances permitted no other alternative. c. That one party explicitly made an economic threat.
d. That the circumstances leading up to the contract were the result of coercive threats or acts of the opposite party. - ✔C. that one party explicitly made an economic threat Which of the following can meet the scienter requirement to establish fraud in the inducement? a. Actual knowledge b. Lack of belief in the statement's truthfulness c. Reckless indifference as to a statement's truthfulness d. All of the above meet the requirement. - ✔D. all of the above meet the requirement Actionable fraud would be likely to be based on falsity of: a. a car owner's statement that, "This car is the best buy you will find." b. a realtor's statement that, "The contractor used 25-year warranted shingles on the roof." c. an art dealer's statement that, "This painting will increase in value." d. a stockbroker's statement that, "This stock should double in price within six months." - ✔B. a realtor's statement that, "The contractor used 25-year warranted shingles on the roof." T/f A new promise to perform a voidable obligation that has not been avoided previously is enforceable without new consideration. - ✔true T/f in some states a promise under seal is binding without consideration - ✔True (T/F) Past actions unbargained for by the parties in an agreement can become valid consideration for a contract. - ✔False T/f Dana gives care to Marnie's dog when Dana finds Marnie's dog ill on the side of the road. After Marnie locates her dog, Marnie promises to reimburse Dana for the cost of treating the dog. Marnie's promise is binding, because there is a bargained-for- exchange. - ✔False (T/F) In most, if not all, cases where there is a legal detriment to the promisee, there is also a legal benefit to the promisor. - ✔True (T/F) The central idea behind consideration is that the parties have intentionally entered into a bargained exchange with one another and have given each other something in exchange for a promise or performance. - ✔True T/F The Code has changed the common law rule regarding modification of a preexisting contract by providing that a contract for the sale of goods can be effectively modified by the parties without new consideration, provided they intend to do so and act in good faith. - ✔true T/f Sandy's private secretary promises to keep the contents of a letter she typed secret if Sandy will give her the next day off with pay. If the secretary takes the day off, Sandy has to pay her for the day. -
