m11 - Assignment module 11 by Shtabina A Chapter 12 Q 1 p...

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Assignment module 11 by Shtabina A. Chapter 12 Q. 1 p. 261 According to the textbook (p.256), fraud in the execution implies misstatements about the content or legal effect of something usually contained in a form or preprinted contract. In the Restatement (Second) of Contracts, in the § 163, the following definition is found: «If a misrepresentation as to the character or essential terms of a proposed contract induces conduct that appears to be a manifestation of assent by one who neither knows nor has reasonable opportunity to know of the character or essential terms of the proposed contract, his conduct is not effective as a manifestation of assent». ( ). It is clear from this point that if fraud in the execution can be proven then this makes the contract voidable. Q. 2 p. 261 The term «puffing» which means exaggeration of the good points of a product, a business, real property and the prospects for future rise in value, profits and growth ( ). In one word it refers to extravagant claims made by sellers in order to attract buyers. Nevertheless, «puffing» cannot be the basis of a lawsuit for fraud or breach of contract unless the exaggeration exceeds the reality. Actually, if the puffery includes outright lies or has no basis in fact, a legal action for revocation of the contract or for fraud against the seller is possible. Thus «puffing» cannot be legally construed to be a guarantee. Q. 3 p. 261 In original common law fraud by silence discovered with the concept of «caveat emptor». It presupposes the seller could remain silent about material facts he or she knows belong to the subject of the contract without fear of being found guilty or
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fraud (Textbook p.254). The main idea is that buyers have a duty to ask the right questions of the seller, forcing the seller to make statements about the subject of the sale. However, «caveat emptor» usually produced unfair results. That is why
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