Business Law Ch14 Part II Question Preview (ID: 24575)


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Economic need generally is sufficient to constitute duress.
a) false
b) true
c)
d)

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
c)
d)

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

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

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) award damages to both parties for the mistakes
c) order Damon to be discharged for fraud
d) enforce the contract without requiring changes

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) fraud
b) undue influence
c) mistake
d) nothing

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 expected increase
d) the amount of the purchase price plus the unexpected decrease

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 fraud.
b) not rescind the contract.
c) rescind the contract on the basis of mistake.
d) rescind the contract on the basis of undue influence.

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) voidable by Cover-All because the omission is material to its decision to issue coverage.
b) binding 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 Bret because the omission is immaterial to Cover-All’s decision to issue coverage.

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) a unilateral mistake
c) duress
d) fraud

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) rescind the contract to invest in the Web site.
b) impose her own scam on Cartier without liability.
c) induce Cartier to give her his other clients’ funds without recourse.
d) sabotage Cartier’s career in any way possible.

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

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) avoid the contract or choose to carry it out.
b) do nothing once she has agreed to pay.
c) recover from her insurer for the cost.
d) recover from the local police for a failure to protect her store.

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