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1.
(p. 386)
A mistake of fact is an erroneous belief about the facts of the contract at the time the
contract is concluded.
2.
(p. 386)
Mistakes in contract law result from untrue statements made by one party to the
contract.
3.
(p. 394)
For fraudulent misrepresentation to be the basis for a contract rescission, the statement
of fact need not be an actual assertion.
4.
(p. 391)
A negligent misrepresentation results when the party making the statement would have
known the truth about the fact had he used reasonable care to discover or reveal it.
5.
(p. 392)
When a fraudulent misrepresentation is at issue, intent to deceive may not be inferred.
6.
(p. 394)
Nondisclosure involves the active hiding of the truth about a material fact.
7.
(p. 395)
Scienter is present when the party accused of making the fraudulent assertion believed
that the assertion was false or made the claim without any regard for whether it was true or
false.
8.
(p. 396)
Undue influence refers to those special relationships in which one person has taken
advantage of his or her dominant position in a relationship to unduly persuade the other person
and interfere with that person's ability to make his or her own decision.
9.
(p. 397)
Threatening physical harm or extortion to gain consent to a contract is classified as
undue influence.
10.
(p. 398)
Unconscionability is a concept strictly limited today to the sale of goods.
11.
(p. 390)
Susie and Sam have significant funds invested with a stock broker named Will and also
with other brokers. Susie and Sam decided to divorce. Susie was really interested in investments,
so the divorce decree provided that Susie would retain "all investment accounts," and Sam would
receive a "cash settlement" from funds the parties had in the bank. Six months after the divorce
was final, it was discovered that Will had absconded to parts unknown with all the money
invested with him. Susie could have withdrawn the funds at the time of the divorce, before Will
left town, but she had no reason for concern and left the funds there for investment purposes.
After discovering Will's wrongdoing, Susie asked Sam to renegotiate the divorce agreement, but
he refused. Which of the following is the most likely result of their dispute if the court follows the
decision of the court in
Simkin
v. Blank
, discussed in the text?
12.
(p. 399)
Which of the following was the result in
Orville Arnold and Maxine Arnold v. United
Companies and Michael T. Searls
, involving the issue of whether an arbitration agreement
entered into as part of a consumer loan transaction containing a substantial waiver of the
consumer's rights, including access to the courts, while preserving for all practical purposes the
lender's right to a judicial forum, is void as a matter of law?
13.
(p. 385)
Which of the following involves a promise to buy or sell that the courts will require the
parties to obey?
14.
(p. 385)
Without legal assent a contract may be ____.
15.
(p. 385)
When a contract is voidable, it may be ______.
16.
(p. 400)
Which of the following was the result on appeal in the Case Opener involving the claim
that Michael Jordan owed $5 million based on his agreement to pay the plaintiff's mother on the
premise that he was the father although it was later determined that the child was not his?
17.
(p. 387)
Which of the following is true regarding European courts?
18.
(p. 386)
When a mistake of fact occurs, ______ is absent.
19.
(p. 387)
A[n] ______ mistake is the result of an error by one party about a material fact.
20.
(p. 387)
A[n] ______ mistake is a mistake that is shared by both parties to an agreement.
21.
(p. 387)
Why is it important to distinguish between unilateral and mutual mistakes?
22.
(p. 387)
Although there are some exceptions, a[n] ______ mistake does not generally void a
contract.
23.
(p. 387)
In cases where both parties to a contract are mistaken about either a current or a past
material fact, either can choose to ______ the contract.
24.
(p. 388)
George offers to sell Penelope a ring that George found in his yard. He and Penelope look
at the ring and decide that they are not sure what it is, probably just a shiny stone. Penelope
pays George $10 for the ring. The ring turns out to be a diamond worth much more than $10.
George wants the ring back, and Penelope refuses. What is the most likely result?
25.
(p. 388)
Which of the following is true regarding the elements that must be satisfied in order for a
mutual mistake to interfere with legal consent?
26.
(p. 387)
What was the result in the
Peerless
case discussed in the text in which there were two
ships named Peerless and the parties disagreed over which ship was the subject of the
contract?
27.
(p. 391)
A[n] ______ misrepresentation results from a false statement about a fact material to an
agreement that the person making the statement believed to be true.
28.
(p. 391)
When a person who makes a misrepresentation has no knowledge about the falsity of the
claim, it is said that the person lacked ____.
