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Unformatted text preview: Chapter 14 - Mistakes, F raud and Voluntary Consent 1. Jill and Karl contract for the sale of Jills 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. 2. 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 either party to rescind the contract a. if the mistake of fact is immaterial. b. if the mistake of fact is material. c. under any circumstances. d. under no circumstances. Fact Pattern 14-A1 (Questions A3-A4 apply) 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. Franks diagnosis later proves to have been wrong. 3. Refer to Fact Pattern 14-A1. According to the reasoning of the court in Roberts v. Century Contractors, Inc ., Franks misdiagnosis is, in terms of its impact on Dinas agreement with Eagle, a. a mutual mistake of fact. b. a unilateral mistake of fact. c. fraudulent misrepresentation. d. nonfraudulent misrepresentation. 4. Refer to Fact Pattern 14-A1. Dina may, according to the decision in 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....
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- Fall '08