Question 1

Don is an elderly man who lives with his nephew Evan.Don is dependent on Evan for care.Evan advises Don to "invest" in Evan's "professional gambling" venture.Evan tells Don that he will no longer provide care unless Don makes this investment.Don liquidates his other investments,signs a contract with Evan,and gives him the funds.Can Don set aside this contract

Accepted Answer

The answer of Don is an elderly man who lives...

Question 2

Augustus,who is Bertha's guardian,convinces her to buy a certain parcel of land from Christy at a greatly inflated price.Augustus may be liable for

Accepted Answer

Augustus, as Bertha's guardian, had a position of power over her and could exert undue influence to convince her to buy the overpriced land. This can make him liable for undue influence. Mistake refers to an error in judgment or fact, puffery is an exaggerated sales talk but not illegal, and unconscionability refers to a contract that is so unfair it shocks the conscience, which is not applicable in this scenario.

Question 3

Pete,the owner of Quality Orchards,contracts to sell fruit to Ripe Produce,Inc.When Pete refuses to perform,Ripe Produce files a suit to enforce the contract.To defend successfully on the ground of unconscionability,Pete must show that enforcement of the contract would be

Accepted Answer

Unconscionability refers to a contract that is so one-sided or oppressive that it shocks the conscience of the court. To successfully defend on the ground of unconscionability, Pete must show that enforcement of the contract would be manifestly unfair or oppressive. Therefore, option C is the correct answer. Options A, B, and D are incorrect as they do not relate to the concept of unconscionability.

Question 4

Flo enters into a contract under Gail's threats. Later, Flo refuses to perform, claiming that she acted under duress.
-Refer to Fact Pattern 13-4.Gail sues to enforce the contract.To be guilty of duress,Gail must have threatened

Accepted Answer

Duress typically involves a threat of a wrongful act, such as physical harm or illegal conduct, rather than mere civil litigation, lost opportunities or social snubbing. Therefore, for Gail's threat to qualify as duress, it must involve a wrongful act.

Question 5

Noddy threatens physical harm to force Odell to sell his business,Pasta Palace,Inc.,to Noddy for a below-market price.This is

Accepted Answer

This scenario describes duress, which is the use of threats or coercion to force someone to do something they wouldn't do willingly. In this case, Noddy is threatening Odell with physical harm to make him sell his business for a below-market price. This is not ethical or legal behavior and would invalidate any contract resulting from such tactics.

Question 6

Lacy uses undue influence to induce Mina to sign a contract to invest her National Education Fund student loan money in Overseas Bank.Mina may

Accepted Answer

Undue influence occurs when one party uses their position of power to pressure another party into entering a contract that is not in their best interest. In this case, Lacy used undue influence to induce Mina to invest her student loan money in Overseas Bank. Therefore, Mina can avoid the contract since it was not entered into willingly and with full knowledge of the consequences.

Question 7

Multi Investments,Inc.,offers to buy Nano Toy Corporation.On May 1,Nano provides copies of its financial statements for the previous year,showing an inventory of $10 million.On May 15,Nano discovers that the previous year's inventory is overstated by $5 million,but does not inform Multi.On June 1,Multi,relying on the financial statements,buys Nano.On June 10,the buyer discovers the inventory overstatement.Can Multi succeed in a suit against Nano for fraud

Accepted Answer

The answer of Multi Investments,Inc.,offers to buy Nano Toy Corporation.On...

Question 8

In negotiating a contract with Mikayla for the use of an empty bottling plant to bottle and market natural spring water,Nero makes a statement that he believes not to be true with respect to a material fact in the deal.Nero is guilty of

Accepted Answer

Nero's statement that he knows to be untrue with respect to a material fact in the deal constitutes fraud. Fraud involves making false statements with the intent to deceive the other party and induce them into entering a contract.

Question 9

Daphne,an accountant,uses undue influence to induce her client Emily to invest in Faux Plastico,Ltd.,a business with little potential.When Emily learns the truth,she can

Accepted Answer

Emily can either enforce the contract or rescind it because undue influence makes the contract voidable at the option of the influenced party.

Question 10

Dale files a suit against Eve,alleging that she used fraud to induce him to enter into a contract with her.Proof of an injury is required

Accepted Answer

Proof of an injury is required to recover damages caused by Eve's alleged fraud. In a lawsuit based on fraud, the plaintiff must show that they suffered some harm as a result of the defendant's fraudulent conduct. This harm could be financial losses, emotional distress, or other damages. Without proof of an injury, the plaintiff cannot recover damages in a lawsuit based on fraud.

Question 11

Flo enters into a contract under Gail's threats. Later, Flo refuses to perform, claiming that she acted under duress.
-Refer to Fact Pattern 13-4.Flo sues to rescind the contract.Gail claims that duress is a defense to enforcement of a contract,not a ground for rescission.The court will probably rule in favor of

Accepted Answer

Duress is a defense to enforcement of a contract, meaning it can be used to prevent the enforcement of a contract. Flo can use duress as a defense to not perform under the contract. However, if she wants to rescind the contract, she would need to prove that the contract was not valid in the first place due to the presence of duress. Therefore, due to the presence of duress, Flo has the right to rescind the contract. Gail cannot prevent Flo from rescinding the contract by arguing that duress is only a defense to enforcement of a contract.

Question 12

Gregor uses duress to force Honi to agree to pay him for protecting Honi's Coffee Shop against vandalism and destruction.Honi may

Accepted Answer

Duress is a type of undue influence that can render a contract voidable, meaning Honi could choose to avoid the contract or choose to carry it out. However, if Honi does agree to pay, she would be obligated to fulfill her end of the contract. Recovery from insurers or police would not be possible in this situation.

Quiz 13: Voluntary Consent