Quizlet 11 - Lecture notes 1 PDF

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BLAW CH 11 Study online at quizlet.com/_58ktii 1.

One issue before the court in Neugebauer v. Neugebauer case was

whether the real estate contract in the case should be rescinded on the grounds of undue influence

2.

In the case of Berardi v. Meadowbrook Mall Company, the court found economic duress, such as that found renders a contract void. Is this statement correct?

No, the court affirmed the summary judgment.

3.

Baxter, a plumber, wants to submit a bid on a city sewer project. He computes the cost, but mistakenly omits the cost of one item. Accordingly, he submits a bid of $430,000 to the city. The next highest bid is $675,000, and the rest of the bids are even higher. The city is happy to have such a low bid, so it accepts Baxter's bid and awards him the contract for the job, even though the city engineer is of the opinion the job cannot be done for less than $650,000. In this case:

the city was aware of Baxter's mistake. When it accepted the bid, with knowledge of Baxter's mistake, the city sought to take an unconscionable advantage of Baxter's error

Maggie owns a valuable show dog, which she knows is suffering from a disease only discoverable by a competent veterinarian. Maggie offers to sell this show dog to Naomi but does not inform her about the dog's condition. Naomi, who is not a veterinarian, makes a reasonable examination of the dog and concludes that the dog is in normal condition and purchases it from Maggie. If Naomi later discovers that the show dog suffers from the disease, can he have the sale set aside?

Yes, because the dog has a hidden defect that would not be discovered in an ordinary examination and Maggie failed to disclose it.

5.

A resulting contract is void when it is brought about by:

fraud in the execution

6.

Stephanie induces Wanda to purchase 100 shares in Zazzy Corporation at a price of $100 per share. Stephanie tells Wanda that she paid $150 for them the previous month. In fact Stephanie only paid $50. How can this representation of a past event be characterized?

The representation of a past event is a misrepresentation of fact.

__________ is an intentional misrepresentation of material fact by one party to the other, who consents to enter into a contract in justifiable reliance on the misrepresentation. Fraud in the inducement renders the contract __________ by the defrauded party.

Fraud in the inducement; voidable

4.

7.

8.

To establish fraud, the misrepresentation must have been known by the one making it to be false and must be made with an intent to deceive. That knowledge is known as:

scienter.

9.

Sam agrees to sell Gina a BMW automobile, both believe to be inoperable, purely for parts. The contract price is $500. Prior to the delivery of the BMW, Sam discovers that the car was simply out of fuel, runs like a dream, and refuses to deliver the automobile to Gina. The value of the operable BMW is now at $3,000.If the court allows Sam to rescind the contract, what would be the reason?

This is a case of material mistake by both parties.

10.

Contracts induced by threats of __________ are not voidable, unlike threats of __________ regardless of whether the coerced party had committed an unlawful act.

civil prosecution; criminal prosecution

11.

Check My Work The law very carefully scrutinizes contracts between those in a relationship of trust and confidence that is likely to permit one party to take unfair advantage of the other. Which of the following is not an example of that type of relationship?

Hair dresser and client

12.

Debra delivers a package to Jackie and requests Jackie to sign a receipt for the package, holds out a simple sheet of paper that says "Receipt," and shows a line where Jackie is supposed to sign. The line, which appears to be at the bottom of the receipt, is actually a promissory note for a $10,000 loan. Jackie signed the line, as indicated by Debra and did not know that she was signing a note. This scenario is an example of:

Fraud in the execution.

13.

Which of the following would be material to the sale of a racehorse?

The horse's running time in the last race was the fastest in the circuit.

14.

Francisco is a concert violinist who is scheduled to perform at the Kennedy Center for the first time. He buys what he is told is a Stradivarius violin from a well-known, reputable dealer in quality violins, and he pays the going rate for a Stradivarius. He later learns the violin is an imitation, sold by the dealer who was trying to make quick money. In this case:

the dealer has committed fraud in the inducement.

15.

Moe is Larry's attorney. Larry is a high school dropout with a tenth-grade education and no job. Moe graduated from an elite law school and is a highlyskilled attorney. Larry recently inherited a substantial amount of money from his mother. Rather than continue to utilize his late mother's financial management company (Golden Wealth), Moe successfully persuades Larry--after hours of closed door meetings and very high-level talks about the stock market, tax law, and legal jargon--to move his money from Golden Wealth and enter into a 10-year management agreement with Stooge Wealth Management, which is owned by Moe's best friend Curly. If Larry seeks to later void his agreement with Stooge Wealth Management, what would be his winning argument?

Moe exerted undue influence on Larry to switch from Golden Wealth to Stooge Wealth.

16.

duress A person should not be held to an agreement he has not entered voluntarily. Accordingly, the law will not enforce any contract induced by:

17.

Sometimes a party makes misrepresentations, which if untrue, could constitute a material misrepresentation. Which of the following fits that description?

This car has a new engine."

18.

In the Maroun v. Wyreless Systems, Inc. case, the court considered which of the following reason to grant summary judgment in Wyreless Systems' favor?

Wyreless Systems' complained-of statements by Maroun were based on future events, and thus could not be a basis for misrepresentation.

19.

When only one party is mistaken as to a fact or facts of the transaction, it is termed

unilateral mistake

20.

Mike, a 75-year-old mechanic, returned Carrie her car after fixing the brakes. Mike told Carrie: "I put some new brakes on her —she should brake with complete ease!" When Carrie drives away, she cannot stop her car and crashes into a dumpster. It is later discovered that Mike failed to reconnect one of the brake lines. There is no indication that Mike knew that he failed to reconnect the brake line. If Carrie sues Mike for fraud, and the court sides with Mike, what would be the court's reason?

Mike lacked scienter because he did not make the statement with the intent to deceive.

21.

Annie wants to buy a vehicle that will tow a camper. She gives the specific measurements and weight of the trailer to the salesman. The salesman tells her that the SUV Annie sees on the car lot would be just perfect to tow the trailer. Annie test drives the vehicle and then buys it. In this case:

Annie was not justified in relying upon the salesman's representation that the car would tow the trailer.

22.

Patrick held a baseball bat to Eric's head to compel him to sign a contract advantageous to Patrick. This contract was entered under:

physical duress.

23.

Sometimes the law imposes a duty of disclosure. When a fiduciary is silent, silence may constitute fraud. A fiduciary is one who:

is in a confidential relationship who owes a duty of trust and loyalty to another....