Question 1

Fraudulent misrepresentation is intentionally misleading another person into a contract.

Accepted Answer

Fraudulent misrepresentation involves a deliberate intent to mislead another person into agreeing to a contract. It is considered a form of deceit and can be prosecuted under the law.

Question 2

What is rescission?

Accepted Answer

The answer of What is rescission?...

Question 3

With regard to the law concerning misrepresentation, which of the following is true?
A)If the buyer realizes the seller persuaded him to contract by a misrepresentation, he will not be able to get the remedy of rescission if he was tainted with wrongdoing himself (i.e., not coming with "clean hands").
B)Damages as a remedy are not available where the misrepresentation becomes part of the contract.
C)A misrepresentation can be a true assertion of fact that induces (persuades) the party to contract.
D)Rescission is available as a remedy for misrepresentation only if it is innocent misrepresentation.
E)The case law allows a remedy for an opinion given by a non-expert.

Accepted Answer

The answer of With regard to the law concerning misrepresentation,...

Question 4

The office manager of a real estate agency was at an office supply store to replace a filing cabinet when he saw a demonstration of a new Xerox copier.Undoubtedly, the agency would benefit from the copier, especially since it had the capability of enlarging the original-a good feature when dealing with the small print of contracts.The next day, he called the manager of the store to discuss the machine further.The seller said that it was "10 years ahead of the competition," that it "was rated as maintenance-free by an independent consumer research group," and that he had "sold five to other real estate agencies in this area" and "had only one left." The agency, relying on these statements, asked to have it delivered.When it arrived, the office manager had learned that every statement made by the seller had been false; furthermore, the seller did not send out the machine discussed, but the older model.Which of the following is true?
A)The agency would have a remedy for breach of contract, but no remedy for other statements that merely persuaded it to enter the contract.
B)The agency could have returned the machine even if it had been the right model, since the remedy of rescission was available to it for misrepresentations made.
C)Had the office supply store sent the right model, the agency would have had no remedy.
D)The agency would have to keep the machine, but could sue the seller for damages for the tort of deceit.
E)This is a "buyer beware" situation and the buyer has no remedy.

Accepted Answer

The answer of The office manager of a real estate...

Question 5

The victim of innocent misrepresentation can sue for damages but cannot ask for rescission.

Accepted Answer

The victim of innocent misrepresentation can ask for rescission, which is the cancellation of the contract, but typically cannot sue for damages unless there's a specific provision in the law allowing for it.

Question 6

A salesman innocently misrepresented a fact about a new printer to a customer.He honestly believed that his statement was true and was not careless.Although this fact was not about a term of the contract, it did induce the customer to buy that printer.The next day, the customer learned the true facts and wanted to return the printer.If the store refused to take it back and the customer sued, which of the following would be the most likely result?
A)The buyer's case would be dismissed
B)An injunction
C)An order of rescission
D)An award of damages
E)An order of specific performance

Accepted Answer

The customer would likely be entitled to an order of rescission, which would allow them to return the printer and receive a refund. This is because the salesman's misrepresentation induced the customer to buy the printer, and the customer had a right to rely on the salesman's representations. The fact that the misrepresentation was innocent and not about a term of the contract does not necessarily excuse the salesman's conduct.

Question 7

Damages as a remedy will not be available in which of the following situations?
A)Jones makes a negligent misstatement, persuading Smith to enter a contract with him.
B)Jones, although being careful, makes an innocent misrepresentation, persuading Smith to enter a contract with him.
C)Jones makes a fraudulent misrepresentation, persuading Smith to enter a contract with him.
D)A false statement made by Jones becomes a term of the contract.
E)None of the above

Accepted Answer

Damages are typically not available for innocent misrepresentation, as it is not based on negligence or fraud. Instead, rescission is the usual remedy.

Question 8

"Where fraudulent misrepresentation is involved, the victim can obtain rescission and/or damages, but where innocent misrepresentation is involved, the only remedy is damages." Discuss the accuracy of this statement.

Accepted Answer

The answer of "Where fraudulent misrepresentation is involved, the victim...

Question 9

With regard to damages, which of the following is false?
A)Where a loss can be calculated, such as where wages already lost are involved or where more money had to be paid to accomplish a contractual purpose, this is referred to as special damages.
B)Where damages have to be estimated, as in compensation for pain and suffering or an estimate of future lost earnings, this is referred to as general damages.
C)In a breach of contract case for punitive damages to be awarded, there must be stand-alone wrongful conduct present.
D)An example of damages would be a case of rescission where a buyer would return a car to the seller and the seller would return the purchase price as well as any incidental repair expenses.
E)Normally, punitive damages designed to punish the breaching party rather than compensate the victim for the loss are not available for breach of contract.

Accepted Answer

The statement in D is false because rescission is a remedy that aims to restore the parties to their pre-contractual position, not a form of damages. Rescission involves undoing the contract and returning the parties to their original state, rather than compensating for a loss through damages.

Question 10

Indicate under which circumstances the remedy of rescission may not be available.

Accepted Answer

The answer of Indicate under which circumstances the remedy of...

Question 11

Where the misrepresentation is innocent, explain the remedies available to the victim.

Accepted Answer

The answer of Where the misrepresentation is innocent, explain the...

Question 12

Mr.Copperfield, a collector of movie memorabilia, bid $50 000 on the Batmobile.After taking delivery, he discovered that the car was not the one actually used in the film Batman; it was merely one of five cars used to promote the film.He is suing the seller, Mr.Eisenberg.If Copperfield could prove any of the following, which would entitle him to return the Batmobile and get his money back?
A)Innocent misrepresentation by Eisenberg
B)Fraudulent misrepresentation by Eisenberg
C)Breach of contract by Eisenberg
D)Negligent misrepresentation by Eisenberg
E)All of the above

Accepted Answer

If Copperfield can prove any form of misrepresentation (innocent, fraudulent, or negligent) or breach of contract by Eisenberg, he may be entitled to rescind the contract and get his money back.

Question 13

Which of the following constitutes a misrepresentation that would not allow the courts to award the equitable remedy of rescission?
A)A man who contracted for an insurance policy did not state on the application form that he had been treated for cancer.He died from the cancer two months later.
B)The seller concealed the broken drawer of the desk from the buyer.He would not be able to see it until he got it home.
C)The seller persuaded the buyer to buy the car by misrepresenting it as having just been serviced and passing the air care test.Neither had been done, but the seller honestly believed that both had been done.
D)The buyer was persuaded by the seller to buy the car by a misrepresentation that it had the fewest repairs of any car of its class.After the buyer learned the truth, he kept the car for three weeks to get some benefit from it before taking it back.
E)None of the above

Accepted Answer

Rescission is not available if the buyer affirms the contract by keeping the goods after discovering the misrepresentation.

Question 14

Keri went to Crandon's computer outlet with her brother Paul, who was buying a laser printer.While she was waiting for him, she saw a poster saying that the store was collecting funds for a special computer for a student recently disabled in an accident.The seller induced Paul to buy the model "X" printer by stating as a fact that the printer could interface with his Macintosh clone.Paul paid $900 for the printer.Also, Keri gave $15 to the student fund after the seller confirmed he was collecting for the student's computer.Later, Paul and Keri learned that neither statement was true (i.e., the printer didn't interface with Paul's computer and the store was doing nothing for the student), and that the seller didn't believe that the statements were true when he made them.On these facts, which of the following is true?
A)Only Keri has a remedy because she had been fraudulently misrepresented.
B)Paul could sue for damages due to an innocent misrepresentation.
C)Keri could sue for damages due to a misunderstanding.
D)The court would rescind Paul's contract only with proof that the seller knew his statement was false.
E)Paul could sue for rescission because of the misrepresentation.

Accepted Answer

Paul could sue for rescission because he was induced to buy the printer based on the seller's misrepresentation about its compatibility with his computer. The misrepresentation was material to the contract and the seller did not believe it to be true when he made the statement. Therefore, Paul has the right to rescind the contract and recover the $900 he paid for the printer. Keri's donation to the student fund was not a contract and therefore she does not have a remedy for fraudulent misrepresentation.

Question 15

Which of the following is false with regard to misrepresentation?
A)If the seller induces the buyer to buy by making a misrepresentation that she honestly thought was true, the buyer has no remedy in equity.
B)A misrepresentation can be made about a term of a contract and result in an award of damages.
C)For fraudulent misrepresentation, the buyer can be granted the equitable remedy of rescission.
D)Fraudulent misrepresentation can result in the seller being sued for damages for the tort of deceit.
E)In law, a misrepresentation is a false statement of fact that persuades someone to enter into a contract.

Accepted Answer

This statement is false as even if the seller honestly believed the misrepresentation to be true, the buyer can still seek a remedy for the misrepresentation in equity. The seller's belief in the truth of the statement is not a defense against a claim of misrepresentation.

Question 16

Discuss the various remedies that are available where one of the parties to the contract is a victim of misrepresentation.

Accepted Answer

The answer of Discuss the various remedies that are available...

Question 17

Mrs.Sharp, the owner of a restaurant, induced the Morissons to buy the business by a misrepresentation; the invoices made her costs appear less than they actually were, and thus her profits more than they actually were.On these facts, which of the following is false?
A)The court could award the equitable remedy of rescission if the evidence showed she had fraudulently misrepresented the costs.
B)The court could not award the equitable remedy of rescission if evidence showed that Mrs.Sharp really believed the invoices were accurate.
C)The court could not award the equitable remedy of rectification because the argument is not about rectifying an erroneous written version of a previous oral contract.
D)The court could terminate the contract for breach of contract if the accurate statement of costs and profit were essential terms of the contract.
E)The cause of action could be for the tort of deceit, if there was evidence that Mrs.Sharp intended to deceive the Morissons.

Accepted Answer

The statement "the court could not award the equitable remedy of rescission if evidence showed that Mrs.Sharp really believed the invoices were accurate" is false. The court could still award rescission if Mrs.Sharp's belief in the accuracy of the invoices was unreasonable and she had not taken reasonable steps to verify their accuracy. The court could also award rescission based on innocent misrepresentation, where Mrs.Sharp genuinely believed the invoices were accurate but they turned out to be false. Therefore, this statement is false.

Question 18

When Gary went into Computer Heaven, Ltd.to get a better manual for the program he was trying to master, he was caught by a demonstration of a computer created by Next, Mr.Job's new firm.He was fascinated by its performance.The salesman, Ross, told Gary that he should have this machine; that "it was the latest computer; no other will ever be better"; that "UBC, Simon Fraser, and BCIT just ordered over 1000 of them"; that he only had "a few left and the demand is so great it will take almost a year for the next shipment to arrive." When Gary said he needed a computer with at least 1000K memory, Ross said this model had 2000K.Gary was persuaded and contracted for the computer.Later, Gary learned that every statement made by Ross was untrue, including the one about the memory capacity; the model had only 800K.On these facts, which of the following is true?
A)Only if Ross knew that all of the statements he made were false could Gary get a remedy.
B)Statements that induced Gary to contract, but that are not the terms of the contract, are not significant enough for the courts to award a remedy by case law or by statute.
C)The exaggerated claim "it was the latest computer; no other will ever be better" is enough, according to the case law, to allow Gary to get out of the contract.
D)Gary could be awarded the equitable remedy of rescission even if Ross honestly believed everything he said was true.
E)Such misrepresentations could result in contractual remedies, legal or equitable, but not in tort remedies.

Accepted Answer

The fact that Ross may have honestly believed everything he said was true does not matter in determining whether Gary has a remedy. Gary was induced to contract based on false statements made by Ross, and as a result, he can seek the equitable remedy of rescission.

Question 19

A computer salesman innocently misrepresented a fact about a Macintosh computer to a customer.Although this fact was not about a term of the contract, it did induce the customer to buy the computer.The customer has now learned the true facts and wants to return the computer.If the store refused to take it back, the customer would ask the court for which equitable remedy?
A)Rescission
B)Restitution
C)Injunction
D)Damages
E)Rectification

Accepted Answer

Rescission is an equitable remedy which allows the injured party to cancel a contract and return the parties to their pre-contractual positions. In this case, the customer was induced to buy the computer due to the salesman's misrepresentation. As a result, the customer can seek rescission of the contract and return the computer to the store.

Question 20

A fraudulent misrepresentation that induces another person to enter into a contract can result in which of the following remedies?
A)Rectification
B)Rescission and/or damages
C)Rescission only
D)Damages only
E)There is no remedy available for fraudulent misrepresentation.

Accepted Answer

A fraudulent misrepresentation is a false statement made with the intention of deceiving another person and inducing them to enter into a contract. If this misrepresentation is discovered, the innocent party may choose to rescind (i.e. cancel) the contract and seek damages for any losses suffered as a result of the fraudulent behavior. Therefore, choice B is the best answer as it includes both rescission and damages as potential remedies for fraudulent misrepresentation.

Quiz 4: Enforcing Contractual Obligations

Fraudulent misrepresentation is intentionally misleading another person into a contract.

What is rescission?

With regard to the law concerning misrepresentation, which of the following is true?

The victim of innocent misrepresentation can sue for damages but cannot ask for rescission.

Damages as a remedy will not be available in which of the following situations?

"Where fraudulent misrepresentation is involved, the victim can obtain rescission and/or damages, but where innocent misrepresentation is involved, the only remedy is damages." Discuss the accuracy of this statement.

With regard to damages, which of the following is false?

Indicate under which circumstances the remedy of rescission may not be available.

Where the misrepresentation is innocent, explain the remedies available to the victim.

Which of the following constitutes a misrepresentation that would not allow the courts to award the equitable remedy of rescission?

Which of the following is false with regard to misrepresentation?

Discuss the various remedies that are available where one of the parties to the contract is a victim of misrepresentation.

Mrs.Sharp, the owner of a restaurant, induced the Morissons to buy the business by a misrepresentation; the invoices made her costs appear less than they actually were, and thus her profits more than they actually were.On these facts, which of the following is false?

A fraudulent misrepresentation that induces another person to enter into a contract can result in which of the following remedies?