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Exam 14: Voluntary Consent

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Question 21

Multiple Choice

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Flo enters into a contract with Global Shipping Ltd. to insure and ship a painting from France to the United States for a certain price. Global makes a mistake in adding the costs, which results in a contract price that is $1,000 less than the true cost. Most likely, a court would

A) allow the parties to rescind the contract.
B) award damages to Flo for the mistake.
C) award damages to Global for the mistake.
D) enforce the contract as is.

E) A) and B)
F) None of the above

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Question 22

True/False

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Each party to a contract assumes the risk that the value of the object of the deal will change in the future.

A) True
B) False

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Question 23

Multiple Choice

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Bram, a salesperson for Cruisin' Motors, promises Deb a certain car will give her a "smooth ride." Bram offers a test drive, which Deb declines. She buys the car but soon realizes its suspension is in poor condition. Deb can rescind the contract on the ground of

The party on whom duress is exerted can choose to carry out the contract.

If contracting parties attach materially different meanings to a contract word or term subject to more than one reasonable interpretation, the contract is void.

Car Lot's salesperson Dick offers to sell Ernie, who is twenty years old, a car. Dick intentionally misrepresents the vehicle's use and repairs. In reliance, Ernie buys the car. To prove fraud, Ernie does not have to show that

A fact that is important and central to the subject matter of a contract is a material fact.

Because value is variable, mistakes of value affect the enforceability of contracts.

Consent to the terms of a contract is voluntary even if one of the parties is forced into the agreement.

In selling a vacant building, Riley, a real estate broker, tells Sam that the property has a certain capacity, making it suitable for a nightclub. Riley knows nothing about the capacity of the building, but it is not as he specifies. Sam buys the building. Sam's best course of action is most likely to

Ray, an employee of Shipping Company, makes a substantial mathematical mistake in totaling estimated transportation costs for Tonnage Inc., which is seeking bids. Consequently, Shipping's bid is substantially low. Any contract with Tonnage that includes the mistake may be rescinded

If a mistake concerns the quality of the object of the contract, the mistake is one of fact.

A bilateral mistake occurs if one party to a contract is mistaken about a material fact and the other party knew or should have known that a mistake was made.

Luc, a vehicle dealer, offers to sell May a truck and trailer, which Luc claims can haul a certain weight. He knows nothing about the capability of the truck, but it is not as he asserts. May buys the truck. On learning the truth, she confronts Luc, who says he was not trying to fool her-he was only trying to make a sale. This is

Data Inc. offers to provide certain services to Enterprise LLC, but mistakenly transposes some of the digits in the price so that $15,400 appears in the offer as $14,500. Enterprise accepts the written offer. Enterprise's best argument in favor of enforcement of the contract is

Because of the potential for punitive damages, plaintiffs often include a claim for fraudulent misrepresentation in their contract disputes.

Hua applies to Inventory Corporation for a position as a coder. Hua has no training in coding. After Hua is hired, Inventory learns the truth. The employer can rescind the contract on the basis of

Ralph enters into a contract with Skye to buy her land based on her assertion that the land is open to development. After the sale, Ralph learns that only a small section of the land can be built on. A local law prohibits construction on the rest of the property. Ralph can

Open Range agrees to sell Pinewood Ranch a remote parcel of land for $15,000. Both parties believe the land to be worthless, but beneath it is shale rock containing oil. A court would

Nero is an elderly man who lives with his nephew Mervyn. Nero is dependent on Mervyn for support. Mervyn advises Nero to "invest" in Mervyn's "professional gambling" venture, or Mervyn will no longer support him. Nero liquidates his other investments and signs a contract with Mervyn, to whom Nero gives the funds. Can Nero set aside this contract?