Mann_TB_Ch11 - Chapter 11Conduct Invalidating Assent...

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Chapter 11—Conduct Invalidating Assent TRUE/FALSE 1. 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. ANS: F PTS: 1 2. 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. ANS: T PTS: 1 3. 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. ANS: F PTS: 1 4. If an agreement is not voluntary and knowing, it will be either void or voidable. ANS: T PTS: 1 5. Physical compulsion and improper threats are the two basic types of duress. ANS: T PTS: 1 6. The difference between fraud and misrepresentation is that fraud involves malice while nonfraudulent misrepresentation is always innocent. ANS: F PTS: 1 7. Rescission is usually permitted where the parties to a contract are both mistaken about a material fact. ANS: T PTS: 1 8. Generally, whether or not the parties deal at arm’s length does not affect whether silence alone amounts to fraud. ANS: F PTS: 1 9. Economic duress renders a contract voidable. ANS: T PTS: 1 10. Undue influence is the taking of unfair advantage of a person by reason of a dominant position based upon a confidential relationship. ANS: T PTS: 1
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11. Fraud in the inducement will render an agreement void. ANS: F PTS: 1 12. For a misrepresentation to be actionable as fraud in the inducement, it must be a misrepresentation of opinion. ANS: F PTS: 1 13. Matt sells bikes at a local discount store. To encourage Bob to buy a more expensive model than he originally contemplated, Matt tells Bob, "This is the most awesome bike money can buy at this price. You can expect lots of riding pleasure." Based on this statement Bob buys the bike. A week later, be- fore his bike is fully paid for, Bob sees a far superior bike for a lower price at another store. Bob can avoid his contract with Matt because of fraudulent misrepresentation. ANS: F PTS: 1 14. If a seller occupies a fiduciary relationship with the buyer and fails to make full disclosure to the buy- er, then the latter will be able to avoid the transaction. ANS: T PTS: 1 15. A unilateral mistake of fact is ordinarily grounds for avoiding a contract.
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Mann_TB_Ch11 - Chapter 11Conduct Invalidating Assent...

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