Question 1

Once a valid contract is formed, courts will enforce that contract no matter what.

Accepted Answer

Courts may not enforce a contract if it is found to be illegal, against public policy, or if there has been a fundamental misunderstanding, fraud, duress, undue influence, or if the contract is unconscionable.

Question 2

Genuine assent may be lacking because of misrepresentation, fraud, duress, undue influence, or unconscionability.

Accepted Answer

Genuine assent may be lacking in a contract if any party involved has been misled or coerced into the agreement, which can occur through misrepresentation, fraud, duress, undue influence, or unconscionability, thus affecting the validity of the contract.

Question 3

Al, noticing a sign in the window of a restaurant which reads "World's Greatest Coffee!", excitedly runs into the place and agrees to buy $100.00 worth of their coffee. Al can get out of that contract because it was a misrepresentation.

Accepted Answer

The statement "World's Greatest Coffee!" is considered puffery, which is a subjective opinion and not a factual claim that can be proven true or false, thus not grounds for misrepresentation in a contract.

Question 4

Fraud can occur when a person takes steps to conceal a material fact.

Accepted Answer

Fraud can indeed occur when a person intentionally conceals a material fact, as this act of concealment can deceive or mislead others into making decisions based on incomplete or false information.

Question 5

Ralph threatens to fire Shirley if she reports incidents of sexual harassment she has faced on the job from a co-worker. She agrees to not report so long as Ralph does not fire her. Shirley could avoid this contract on the basis of duress.

Accepted Answer

Shirley's agreement to not report the incidents in exchange for not being fired is made under duress, as it involves a wrongful threat (losing her job) that coerces her into agreeing to the contract, making it voidable at her discretion.

Question 6

Courts routinely render a contract unenforceable due to unconscionability.

Accepted Answer

Courts do not routinely render contracts unenforceable due to unconscionability; it is a relatively rare legal finding that requires a showing of both procedural and substantive elements that are so unfair or oppressive that the contract shocks the conscience of the court.

Question 7

Unconscionability allows a court to render a contract unenforceable if the consideration is grossly unequal, such that it shocks the conscience.

Accepted Answer

Unconscionability is a doctrine in contract law that allows courts to refuse to enforce a contract or a clause within a contract if the terms are excessively unfair or oppressive to one party, often due to unequal bargaining power, and thus "shock the conscience" of the court.

Question 8

A verbal contract for the sale of real estate is enforceable under the statute of frauds as long as the parties agree to it.

Accepted Answer

The Statute of Frauds requires that contracts for the sale of real estate must be in writing to be enforceable. Verbal agreements do not satisfy this requirement.

Question 9

The parol evidence rule states that any oral agreements made that contradict the intended final writing of the agreement are not enforceable.

Accepted Answer

The parol evidence rule is a legal principle that prevents parties to a written contract from presenting extrinsic evidence of terms or agreements that contradict, modify, or vary the written terms of the contract that appears to be whole and complete on its face.

Question 10

Consent defects include all of the following except
A) Misrepresentation
B) Fraud
C) Unconscionability
D) Unwiseness

Accepted Answer

Unwiseness is not considered a defect of consent in the context of contracts. Misrepresentation, fraud, and unconscionability are all recognized as defects that can invalidate consent. Unwiseness, however, refers to a poor or unwise decision by a party entering into a contract, which does not by itself invalidate consent.

Question 11

Without genuiness of assent
A) A promise made is not legally binding.
B) The contract lack legality of purpose.
C) The parties to the contract are bound to the terms only if the court determines it is fair.
D) The parties must renegotiate the terms of the contract.

Accepted Answer

Genuineness of assent is essential for a contract to be legally binding. If assent (agreement to the terms) is not genuine, due to factors like fraud, duress, undue influence, or mistake, the contract may be voidable at the option of the aggrieved party.

Question 12

When one person has more or better information than the other is an example of
A) Unequal bargaining power
B) Unjust enrichment
C) Information asymmetry
D) Procedural defect

Accepted Answer

Information asymmetry occurs when one party in a transaction has more or superior information compared to another. This concept is particularly relevant in markets where the seller knows more about the product than the buyer, potentially leading to an imbalance in the transaction.

Question 13

Maddie cannot read. She signs a cell phone agreement without being able to read the document. This is an example of
A) Unequal bargaining power
B) Unjust enrichment
C) Substantive defect
D) Information asymmetry

Accepted Answer

Information asymmetry occurs when one party in a transaction has more or superior information compared to another. In this case, Maddie's inability to read the document she is signing puts her at a significant disadvantage compared to the party presenting the agreement, as she cannot understand the terms to which she is agreeing.

Question 14

Cliff sells a calculator to Lydia. He states he has only used it for his geometry class which was a lie because he never took geometry. He used it in his basic math class. Since Cliff lied to Lydia, most likely would Lydia be successful in asserting the defense of misrepresentation to get out of the contract?
A) Yes if Cliff lied about any fact during the negotiation process.
B) No, unless the court determines his lie about the class in which he used the calculator was a lie about a material fact.
C) Yes if he intentionally lied.
D) No as most likely the court will rule his lie was unintentional.

Accepted Answer

The success of Lydia's defense of misrepresentation hinges on whether the lie was about a material fact. The specific class in which the calculator was used is unlikely to be considered material to the contract's nature, thus making it less likely for Lydia to succeed based on this lie alone.

Question 15

A fact is material if
A) It concerns a basic assumption in the agreement that could change the value of the contract.
B) The reasonable person would find it misleading during the negotiation process of the contract.
C) It is any fact stated in contract negotiations that either party made.
D) The fact is objectively verifiable as true or false.

Accepted Answer

A fact is considered material if it concerns a basic assumption in the agreement that could change the value of the contract, as it directly impacts the decision-making process of the parties involved.

Question 16

In order for a party to avoid a contract based upon the defense of misrepresentation, all of the following must be present, except
A) It must be a misrepresentation about a material fact.
B) The person must have justifiably relied upon that fact.
C) It must be a misrepresentation about a fact.
D) It must be a lie about an opinion.

Accepted Answer

Misrepresentation involves false statements about facts, not opinions. A lie about an opinion does not constitute misrepresentation in the context of contract law, as misrepresentation must concern material facts that are relied upon justifiably by the other party.

Question 17

Josh sells t-shirts at an amusement park. When selling t-shirts, he often tells people that the shirts are the softest shirts ever created. If he did not truly believe that and it was a lie, would this be an example of misrepresentation?
A) No because it is a lie about an opinion.
B) Yes because it is a lie about an opinion.
C) No because it is not an important opinion.
D) Yes because he lied.

Accepted Answer

Misrepresentation typically involves a false statement about a fact, not an opinion. Saying the shirts are the "softest ever" is a subjective claim, not a factual one, so it's considered puffery rather than misrepresentation.

Question 18

Custom Candy Creations, a candy shop, has on its sign "The Finest Candy in the World." This is an example of
A) Fraud
B) Misrepresentation
C) Puffing
D) Misleading

Accepted Answer

This statement is an example of puffing, which refers to exaggerated or hyperbolic statements that a reasonable person would not take literally. It's a common sales tactic that is not considered illegal or misleading in the context of advertising.

Question 19

In the case of Vokes v. Arthur Murray Dance Studio, the court determined that the dance instructor's intentional lie to an elderly widow, claiming that she had excellent dance potential, was
A) An opinion and not misrepresentation.
B) A fact because the dance instructor had superior knowledge.
C) An opinion that she unreasonably relied upon.
D) A statement of opinion because it was not quantifiable.

Accepted Answer

The court determined that the dance instructor's claim was a fact because of the superior knowledge the instructor had regarding dance skills, making it a misrepresentation upon which the widow could rely.

Question 20

Fraud requires
A) The appearance of a lie
B) Reasonable likelihood of a lie
C) Actual knowledge of a lie
D) Evil motive of a lie

Accepted Answer

Fraud requires actual knowledge of a lie, meaning the person committing fraud must be aware that they are not telling the truth.

Quiz 9: Enforceability

Once a valid contract is formed, courts will enforce that contract no matter what.

Genuine assent may be lacking because of misrepresentation, fraud, duress, undue influence, or unconscionability.

Al, noticing a sign in the window of a restaurant which reads "World's Greatest Coffee!", excitedly runs into the place and agrees to buy $100.00 worth of their coffee. Al can get out of that contract because it was a misrepresentation.

Fraud can occur when a person takes steps to conceal a material fact.

Ralph threatens to fire Shirley if she reports incidents of sexual harassment she has faced on the job from a co-worker. She agrees to not report so long as Ralph does not fire her. Shirley could avoid this contract on the basis of duress.

Courts routinely render a contract unenforceable due to unconscionability.

Unconscionability allows a court to render a contract unenforceable if the consideration is grossly unequal, such that it shocks the conscience.

A verbal contract for the sale of real estate is enforceable under the statute of frauds as long as the parties agree to it.

The parol evidence rule states that any oral agreements made that contradict the intended final writing of the agreement are not enforceable.

Consent defects include all of the following except

Without genuiness of assent

When one person has more or better information than the other is an example of

Maddie cannot read. She signs a cell phone agreement without being able to read the document. This is an example of

A fact is material if

In order for a party to avoid a contract based upon the defense of misrepresentation, all of the following must be present, except

Josh sells t-shirts at an amusement park. When selling t-shirts, he often tells people that the shirts are the softest shirts ever created. If he did not truly believe that and it was a lie, would this be an example of misrepresentation?

Custom Candy Creations, a candy shop, has on its sign "The Finest Candy in the World." This is an example of

In the case of Vokes v. Arthur Murray Dance Studio, the court determined that the dance instructor's intentional lie to an elderly widow, claiming that she had excellent dance potential, was

Fraud requires