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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
false
B
true
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
true
B
false
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
entitled to another horse of equivalent value
B
required to pay because she assumed the risk the horse might die
C
not required to pay due to the UNILATERAL mistake
D
not required to pay due to the MUTUAL mistake
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 unilateral mistake
B
a bilateral mistake
C
a fraudulent misrepresentation
D
unconscionable
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
reform the contract to reflect the figures accurately
B
enforce the contract without requiring changes
C
award damages to both parties for the mistakes
D
order Damon to be discharged for fraud
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
undue influence
B
nothing
C
fraud
D
mistake
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
the amount of the purchase price plus the unexpected decrease
B
the amount of the purchase price plus the expected increase
C
the amount of the purchase price
D
nothing
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
not rescind the contract.
B
rescind the contract on the basis of mistake.
C
rescind the contract on the basis of undue influence.
D
rescind the contract on the basis of fraud.
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 due to Cover-All’s failure to discover Bret’s conviction.
B
voidable by Bret because the omission is immaterial to Cover-All’s decision to issue coverage.
C
binding because the omission is immaterial to Cover-All’s decision to issue coverage.
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
innocent misrepresentation.
B
duress
C
a unilateral mistake
D
fraud
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
impose her own scam on Cartier without liability.
D
rescind the contract to invest in the Web site.
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
duress
B
fraud
C
puffery
D
undue influence
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
recover from her insurer for the cost.
C
avoid the contract or choose to carry it out.
D
recover from the local police for a failure to protect her store.
*select an answer for all questions
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