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Business Law Ch14 Part II
Test Description: Good Luck!
Instructions: Answer all questions to get your test result.
1) Economic need generally is sufficient to constitute duress.
A
true
B
false
2) A contract written exclusively by one party and presented to the other party on a take-it-or-leave-it basis is an adhesion contract.
A
false
B
true
3) ill and Karl contract for the sale of Jill’s horse for $1,000. Unknown to either party, the horse has died. Karl is
A
not required to pay due to the MUTUAL mistake
B
not required to pay due to the UNILATERAL mistake
C
entitled to another horse of equivalent value
D
required to pay because she assumed the risk the horse might die
4) Moore Properties Inc. offers to sell land for $112,000. A customer agrees to buy the land at that price, but discovers the price should have been $121,000. Moore's misstatement of the price is:
A
a fraudulent misrepresentation
B
unconscionable
C
a bilateral mistake
D
a unilateral mistake
5) Crosscreek County and Bridgework Corporation enter into a construction contract that includes mathematical specifications. Later Crosscreek, whose engineer, Damon, compiled the specs, learns that some of the dollar figures are incorrect. Bridgework r
A
order Damon to be discharged for fraud
B
reform the contract to reflect the figures accurately
C
enforce the contract without requiring changes
D
award damages to both parties for the mistakes
6) Sylvia creates a profile for Today’s Date, Inc., an online dating service. She exaggerates her appealing features and posts a photo of her friend Uva, whom Sylvia thinks is prettier. Enticed by the profile, Van subscribes to the service so that he ca
A
mistake
B
undue influence
C
fraud
D
nothing
7) May is a stockbroker. Due to May’s statements, Nora believes that the price of OK Goods, Inc. (OKGI), a widely traded stock, is going to in¬crease sub¬stantially. Nora buys 500 shares of OKGI at $10 per share, but the price soon drops to $2. Nora can
A
nothing
B
the amount of the purchase price
C
the amount of the purchase price plus the unexpected decrease
D
the amount of the purchase price plus the expected increase
8) Gina induces Hu to enter into a contract for the purchase of a condominium about which Gina knowingly misrepresents a number of material features. When Hu discovers the truth, Hu can
A
rescind the contract on the basis of undue influence.
B
rescind the contract on the basis of fraud.
C
not rescind the contract.
D
rescind the contract on the basis of mistake.
9) Bret is convicted of arson for burning down his warehouse to collect the in-surance. On an application for insurance from Cover-All Insurance Company on a new building, in answer to a question about prior convictions, Bret does not disclose his convi
A
binding because the omission is immaterial to Cover-All’s decision to issue coverage.
B
voidable by Bret because the omission is immaterial to Cover-All’s decision to issue coverage.
C
binding due to Cover-All’s failure to discover Bret’s conviction.
D
voidable by Cover-All because the omission is material to its decision to issue coverage.
10) Nero makes an honest but erroneous statement that misrepresents a material fact in a contractual transaction with Odell. Nero is guilty of
A
duress
B
innocent misrepresentation.
C
fraud
D
a unilateral mistake
11) Cartier, an accountant, convinces his client Bianca to sign a contract to invest her savings in a nonexistent social-networking Web site. When Bianca learns the truth, she can
A
induce Cartier to give her his other clients’ funds without recourse.
B
sabotage Cartier’s career in any way possible.
C
rescind the contract to invest in the Web site.
D
impose her own scam on Cartier without liability.
12) Gary threatens physical harm to force Hugh to sell his business, Imports from Asia, Inc., to Gary for a below-market price. This is
A
puffery
B
fraud
C
undue influence
D
duress
13) Sam uses duress to force Tanya to agree to pay him for protecting her re¬tail store—Tanya’s Trends—against vandalism and destruction. Tanya may
A
do nothing once she has agreed to pay.
B
avoid the contract or choose to carry it out.
C
recover from her insurer for the cost.
D
recover from the local police for a failure to protect her store.
*select an answer for all questions
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