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Exam 13: Voluntary Consent

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Question 31

Multiple Choice

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In selling a 300-acre farm to Organic Farms, Peyton tells the buyer that the land "will be worth a whole lot more in the future." This is

A) duress.
B) fraudulent misrepresentation.
C) mistake.
D) opinion.

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

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Question 32

Multiple Choice

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Carlos and David contract for the sale of five hundred head of Carlos's cattle for $195 per head. Unknown to either party, an unforeseen storm has struck the herd and many of the cattle have died. David is

A) entitled to recover the value of the lost cattle.
B) not required to pay due to the bilateral mistake.
C) not required to pay due to the unilateral mistake.
D) required to pay because he assumed the risk the cattle might die.

E) B) and C)
F) A) and B)

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Question 33

True/False

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Forcing a party to enter into a contract under the fear of threats is legally defined as undue influence .

Ruth, who is Sal's guardian, convinces him to buy a certain parcel of land from Tyrone at a greatly inflated price. Ruth may be liable for

Fact Pattern 13 - 3 County Title Company processes information furnished by others to transfer title to real estate from a seller to a buyer. In performing this task for a sale of land from Dale to Ezra, the furnished information is mistaken. Refer to Fact Pattern 13-3. The contract between Dale and Ezra that includes the mistake may be rescinded if the mistake involves

Don threatens physical harm to force Ed to sell his Flower Shop to Don for a below-market price. This is

If a seller knows of a serious potential problem that the buyer cannot reasonably be expected to discover, the seller may have a duty to speak.

Health Source, Inc., offers to buy Medico Equipment & Supplies Corporation. On June 1, Medico gives Health Source copies of Medico's financial statements for the pre-vious year. The statements show an inventory of $10 million. On June 15, Medico discovers that the previous year's inventory is overstated by $500,000, but does not inform Health Source. On July 1, Health Source, relying on the financial statements, buys Medico. On July 10, Health Source discovers the inventory overstatement. Can Health Source succeed in a suit against Medico? On what basis?

Even if the defects on a piece of property are obvious, the buyer can justifiably rely on the seller's misrepresentations concerning those defects.

Fact Pattern 13 - 3 County Title Company processes information furnished by others to transfer title to real estate from a seller to a buyer. In performing this task for a sale of land from Dale to Ezra, the furnished information is mistaken. Refer to Fact Pattern 13 - 3. If Dale and Ezra are both ignorant of the mistake, it is

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

Alan induces Beth to enter into a contract for the purchase of a Chef's Burger House restaurant. Alan knowingly misrepresents a number of material features about the restaurant and the business. When Beth discovers the truth, she can rescind the contract on the basis of

Fact Pattern 13 - 3 County Title Company processes information furnished by others to transfer title to real estate from a seller to a buyer. In performing this task for a sale of land from Dale to Ezra, the furnished information is mistaken. Refer to Fact Pattern 13 - 3. The contract between Dale and Ezra that includes the mistake may be rescinded if the mistake concerns

Intent to deceive is an element of fraud.

In general, a person should not rely on a non-lawyer's statement about a point of law.

The party on whom duress is exerted can choose to avoid the entire transaction.

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

The identity of the parties to a contract is an example of a material fact.

When a seller uses "seller's talk" to tout their products and services, a seller risks being liable for fraud.

Fact Pattern 13-1 Data Storage Inc. offers to provide cloud-computing 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. Refer to Fact Pattern 13-1. Data Storage's best defense against enforcement of the contract is that Enterprise knew