Jentz 11e-TBB-Ch14 - Chapter 14 Mistakes, Fraud, and...

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Chapter 14Mistakes, Fraud, andVoluntary ConsentTRUE/FALSE QUESTIONSB1.A mistake of fact cannot be bilateral.PAGE:264TYPE:N
NAT: AACSB AnalyticAICPA LegalB2.A mistake in value will usually enable a party to a contract to avoid it.PAGE:266TYPE:=
NAT: AACSB AnalyticAICPA LegalB3.Even if an obvious, significant clerical error exists in a written contract, thecontract is enforceable.PAGE:266TYPE:=
NAT: AACSB AnalyticAICPA LegalB4.A  general contractor who  knows  that a subcontractor’s bid is a mistakecannot enforce the bid.PAGE:266TYPE:=
NAT: AACSB Reflective AICPA LegalB5.A general contractor who suspects that a subcontractor’s bid is a mistakecan still enforce the bid.PAGE:266TYPE:=
NAT: AACSB Reflective AICPA Legal139
140          TEST BANK B—UNIT THREE:  CONTRACTS AND E-CONTRACTSB6.If the subject matter of a contract turns out to be more valuable than one ofthe parties believed it would be, that party can rescind the contract.PAGE:266TYPE:=
NAT: AACSB Reflective AICPA Legal
CHAPTER 14:  MISTAKES, FRAUD, AND VOLUNTARY CONSENT          141B7.To reform a contract is to cancel it.PAGE:266TYPE:N
NAT: AACSB Reflective AICPA LegalB8.An innocent party can rescind a fraudulent contract.ANSWER:TPAGE:267TYPE:=NAT: AACSB AnalyticAICPA LegalB9.An innocent party may seek damages for a fraudulent contract.ANSWER:TPAGE:267TYPE:+NAT: AACSB AnalyticAICPA LegalB10.Reliance on an “expert’s” statement of opinion may be the basis for an ac-tion based on fraud.PAGE:267TYPE:=
NAT: AACSB Reflective AICPA LegalB11.Misrepresentation of a material fact can occur through words alone.PAGE:267TYPE:N
NAT: AACSB Reflective AICPA LegalB12.To recover for fraud, a plaintiff must be under twenty-one years of age.PAGE:267TYPE:N
NAT: AACSB AnalyticAICPA LegalB13.Misrepresentation of a material fact cannot occur through conduct alone.PAGE:269TYPE:N
NAT: AACSB Reflective AICPA LegalB14.A seller’s failure to disclose a serious defect about a product for sale maygive rise to an action for fraud.PAGE:269TYPE:=
NAT: AACSB Reflective AICPA Legal
142          TEST BANK B—UNIT THREE:  CONTRACTS AND E-CONTRACTSB15.Scienter exists if a party makes a statement that he or she knows is nottrue.PAGE:269TYPE:=
NAT: AACSB AnalyticAICPA Legal
CHAPTER 14:  MISTAKES, FRAUD, AND VOLUNTARY CONSENT          143

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