Question 1

Where a party inadvertently uses the wrong words in stating the terms of a contract,and another party enters into the contract,the court may set aside the contract if a reasonable bystander would conclude that the party had made a mistake.

Accepted Answer

This statement is true. It refers to the legal principle of mistake in contract law, where if one party makes a mistake in the terms of a contract and the other party accepts the contract, the court may set it aside if it is deemed reasonable for the mistaken party to have made the error and for the other party to have been aware of the mistake.

Question 2

Paul,a poor farmer,has just learned he has a serious medical problem.The medication needed is extremely expensive and not covered by medical insurance.Hearing of his plight,the next-door neighbour offers to buy Paul's prize steer,but at half its value.Paul feels he has no choice but to sell the steer,because he needs the money,so he agrees to sell it for half its value.Legally speaking,what has this neighbour done?

Accepted Answer

The answer of Paul,a poor farmer,has just learned he has...

Question 3

Scott,an independent businessman,is asking his wife to pledge her inherited family homestead towards a business loan he has arranged at the bank.She seems perfectly willing to do this.Yet,to avoid a possible later legal claim of undue influence by Scott's wife,which would be wisest for the bank to do?

Accepted Answer

By having Scott's wife get independent legal counsel, the bank can ensure that she fully understands the legal implication of pledging her inherited family homestead towards a business loan. This will also prevent any possible later legal claim of undue influence by Scott's wife as she will have received legal advice from a third-party source.

Question 4

The most fundamental mistake that radically changes the nature of the bargain of the parties is a mistake about the existence of the subject matter of the contract.

Accepted Answer

If the subject matter of the contract does not exist, then it is impossible to fulfill the terms of the contract, which fundamentally changes the nature of the bargain. This is known as a mistake as to the existence of the subject matter, and can render the contract void.

Question 5

An innocent party can lose her or his right to repudiate a contract made with undue influence by

Accepted Answer

If an innocent party fails to repudiate promptly after coming out from under the undue influence, she or he may lose the right to repudiate the contract made with undue influence.

Question 6

Where the wrong words are inadvertently used by a party in stating the terms of a contract,resulting in a mistake,the contract will be binding on the party if it was reasonable for the other party to rely on the words used.

Accepted Answer

This is the doctrine of mutual mistake, which holds that if one party makes a mistake in drafting a contract, but the other party was unaware of the mistake and had reason to rely on the incorrect language, the contract will still be binding.

Question 7

Misrepresentation never gives rise to damages for torts as well as rescission in contract.

Accepted Answer

This statement is false. Misrepresentation can give rise to both tortious liability for damages and to rescission of a contract.

Question 8

If the parties disagree over what the words in a contract mean,the court will declare the contract void.

Accepted Answer

If parties disagree over the meaning of words in a contract, the court will interpret the words to determine their meaning and intentions of the parties. The court will not declare the contract void unless the dispute is over a material term and the parties are unable to reach a mutual agreement or modify the contract.

Question 9

With the issue of undue influence,what must the victim do to shift the burden of proof to the dominant party?

Accepted Answer

The victim must show that circumstances likely led to undue influence to shift the burden of proof to the dominant party. This involves demonstrating that the relationship and situation were such that undue influence could have occurred.

Question 10

Common mistake is a situation in which both parties believe the same misunderstanding or mistake about the contract.

Accepted Answer

In a common mistake, both parties are mistaken about the same thing, which can lead to a contract being voidable or void.

Question 11

Mistake about terms includes the inadvertent use of wrong words.

Accepted Answer

Mistake about terms refer to the use of incorrect vocabulary or terminology.

Question 12

Guido is an unsavory money lender who charges 35 percent interest.Upon learning that Sylvia,one of his clients,had become unable to make her weekly payment,Guido tells her that he has "a way of dealing with defaulters where they think twice next time." She then promptly signs a contract agreeing to a 50 percent rate over a longer period of time.Sylvia now wants to get out of this second contract.As a lawyer,what should you advise Sylvia to do?

Accepted Answer

Sylvia should claim that she entered the contract under duress, as Guido's threatening statement could be interpreted as a form of coercion, making her consent to the new terms not truly voluntary.

Question 13

Regarding misrepresentation in a sale of land

Accepted Answer

The answer of Regarding misrepresentation in a sale of land
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Question 14

It is a criminal offence for a lender to charge an interest rate in excess of 50 percent.

Accepted Answer

The legality of charging interest rates above 50 percent depends on the jurisdiction and specific laws in place, such as usury laws, which vary by region.

Question 15

The cooling-off period is a time during which a consumer may cancel or rescind a contract without any reason whatsoever.

Accepted Answer

During the cooling-off period, a consumer has the right to cancel or rescind a contract without providing any specific reason. This is a legal protection provided to consumers in many countries, including the United States and the United Kingdom. The length of the cooling-off period varies depending on the type of contract and the jurisdiction, but it typically ranges from 3 to 14 days.

Question 16

In contract law,the domination of one party over the mind of another to such a degree as to deprive the latter of the will to make an independent decision is known as undue domination.

Accepted Answer

The correct term for the concept described is "undue influence," not "undue domination." Undue influence occurs when one party to a contract is able to exert a significant amount of influence over the decision-making of another party, to the point where that second party's decision is not truly their own.

Question 17

A spouse may set aside a transaction if he or she can prove actual undue influence.

Accepted Answer

This is true. If a spouse can prove that he or she was unduly influenced into a transaction by the other spouse, the transaction can be set aside.

Question 18

A legal mistake is an error in judgment.

Accepted Answer

A legal mistake refers to an error regarding the legal aspects of a situation, such as misunderstanding the law or its application, rather than an error in judgment.

Question 19

A statement of opinion such as "it is the best car in the lot" can amount to a misrepresentation.

Accepted Answer

A statement of opinion does not constitute a factual claim and therefore cannot be considered a misrepresentation in a legal sense. Misrepresentation typically involves false statements of fact.

Question 20

Where a contract deals with the sale of goods,such as a car,at common law,the duty of the purchaser is to inspect the goods before she or he purchases them.

Accepted Answer

The common law doctrine of caveat emptor (let the buyer beware) places the duty on the purchaser to examine the goods before buying them. This is to ensure that the buyer is aware of any defects or issues with the goods and can make an informed decision about whether or not to proceed with the purchase.

Quiz 9: Grounds Upon Which a Contract May Be Set Aside: Mistake and Misrepresentation