Question 1

The Statute of Frauds applies to the sale of all vehicles.

Accepted Answer

The Statute of Frauds does not apply to the sale of all vehicles. It only applies to the sale of goods for $500 or more, which may include some vehicles but not all. However, some states may have additional requirements for the sale of vehicles, such as a written contract or specific disclosures, so it's important to research the laws in your state.

Question 2

There must be privity between the parties in a case of fraud.

Accepted Answer

Privity means a direct legal relationship between the parties involved in a case. In the case of fraud, there must be privity between the parties for the fraud to be actionable. This means that the parties must have been in a direct legal relationship with each other, such as a contract or fiduciary relationship, for the fraud to be actionable.

Question 3

The parol evidence rule allows oral testimony to revise the terms of contracts written more than one year ago.

Accepted Answer

The parol evidence rule typically prohibits the admission of oral or written evidence that contradicts or adds to the terms of a written contract. It is intended to give legal effect to the final, written version of a contract and prevent parties from claiming that unwritten or prior oral agreements should modify or override the terms of the contract. The rule generally applies to all contracts, regardless of their age.

Question 4

In Deschamps v. Treasure State Trailer Court, where the buyer of a trailer court said he was promised the water system was in good condition when in fact it was not, the Montana Supreme Court held that oral testimony could not contradict the written contract.

Accepted Answer

The Montana Supreme Court held that oral testimony could not contradict the written contract in Deschamps v. Treasure State Trailer Court.

Question 5

Even if misrepresentation is innocent, the party who engaged in misrepresentation is liable for losses suffered by the party who received the bad information.

Accepted Answer

The answer of Even if misrepresentation is innocent, the party...

Question 6

Fraud requires scienter; that is the party accused of fraud must have wanted to mislead the other party.

Accepted Answer

Scienter, meaning knowledge or intent, is a required element for a claim of fraud. The party accused of fraud must have had the intention to deceive or mislead the other party for it to be considered fraud.

Question 7

The Statute of Frauds requires that a promise to pay debts of another person must be in writing to be a valid contract.

Accepted Answer

This statement is true. The Statute of Frauds is a law that requires certain types of contracts to be in writing in order to be enforceable, including promises to pay the debts of another person.

Question 8

The parol evidence rule holds that oral testimony by one party that contradicts a written contract cannot be accepted as evidence in court.

Accepted Answer

The parol evidence rule is a legal principle that generally prohibits the introduction of extrinsic or oral evidence to modify, vary or contradict a written contract. When a contract is reduced to writing, it is presumed to represent the final and complete agreement between the parties, and any prior or contemporaneous oral agreements or negotiations are generally excluded from consideration. Therefore, in most cases, if a party attempts to introduce oral testimony that contradicts a written contract, it will be excluded as inadmissible under the parol evidence rule.

Question 9

The parol evidence rule allows oral testimony to help the court understand a contract in which fraud is claimed.

Accepted Answer

The parol evidence rule generally prohibits the use of prior or contemporaneous oral agreements or discussions to contradict, vary, or add to the terms of a written contract. However, an exception exists for cases where fraud or misrepresentation is alleged. In such cases, oral testimony may be admissible to help the court understand the nature of the fraud or misrepresentation and its effect on the agreement.

Question 10

The Statute of Frauds holds that if you are going to paint my house two years from today, the contract should be in writing.

Accepted Answer

The Statute of Frauds requires that certain types of contracts be in writing to be enforceable, including contracts for the sale of land or goods worth more than a certain amount, contracts that cannot be completed within one year, and contracts in which one party promises to pay the debt of another party. Therefore, if someone is going to paint your house two years from today, the contract should be in writing because it cannot be completed within one year.

Question 11

Misrepresentation, unlike fraud, is not grounds for rescinding a contract.

Accepted Answer

Misrepresentation can be grounds for rescinding a contract if it is a material misrepresentation made intentionally or through negligence. Therefore, the statement is false.

Question 12

In Deschamps v. Treasure State Trailer Court, where the buyer of a trailer court said he was promised the water system was in good condition when in fact it was not, the Montana Supreme Court held that the oral promise could amend the contract.

Accepted Answer

The Montana Supreme Court in Deschamps v. Treasure State Trailer Court held that the oral promise regarding the water system's condition could not amend the written contract due to the parol evidence rule, which generally prohibits the use of oral statements to contradict or modify the terms of a written contract.

Question 13

In a suit for fraud, the losses suffered that are sued for must be related to the action that was induced by the fraud.

Accepted Answer

In a suit for fraud, the losses suffered must be causally related to the fraud. The plaintiff must prove that they suffered damages as a result of relying on the fraudulent action or misrepresentation. If there is no causal connection between the fraud and the losses suffered, the suit may not be successful.

Question 14

Misrepresentation, to be grounds for rescinding a contract, must have included a misstatement of a material fact.

Accepted Answer

Misrepresentation only allows for rescinding of a contract if it involved a misstatement of a material fact. If the misrepresentation was related to a non-material fact, it wouldn't provide grounds for rescinding the contract.

Question 15

For there to be damages in a case of fraud, there must be proximate cause between the false information and the losses suffered.

Accepted Answer

Proximate cause is a common law principle which requires a plaintiff to prove that the defendant's action was the direct cause of the plaintiff's harm. In a case of fraud, the plaintiff must establish that their losses were caused by the defendant's false information or misrepresentation. Without proximate cause, there can be no damages awarded in a case of fraud.

Question 16

The Statute of Frauds requires that all contracts for the sale of property must be proven by written evidence signed by the defendant.

Accepted Answer

The Statute of Frauds does require that contracts for the sale of property be proven by written evidence signed by the defendant.

Question 17

The Statute of Frauds is quite old, having evolved from an English law of 1677.

Accepted Answer

The Statute of Frauds did indeed originate from an English law passed in 1677.

Question 18

The parol evidence rule allows oral testimony to help the court clarify terms of a vague contract.

Accepted Answer

The parol evidence rule allows for oral testimony to be used to clarify ambiguous or unclear terms in a contract. It prohibits the introduction of evidence beyond the four corners of a written agreement to contradict, vary, or add to its terms.

Question 19

Courts generally will not accept digital signatures because of the lack of security.

Accepted Answer

This statement is no longer true. Nowadays, digital signatures can be accepted by courts as they provide security measures such as encryption and authentication to ensure the authenticity and integrity of signed documents. However, there may be certain legal requirements for digital signatures to be considered valid in court.

Question 20

The Statute of Frauds states that all contracts that involve more than $1,000 must be in writing.

Accepted Answer

The Statute of Frauds varies by state, but generally it requires certain types of contracts to be in writing (such as contracts for the sale of goods over $500, contracts for the sale of land, and contracts that cannot be performed within one year). However, the threshold amount for written contracts may differ depending on the state's laws.

Quiz 10: Contracts