BUL 5810 STUDYS GUIDE ANSWERS AND
QUESTIONS SET A+
✔✔Sometimes a party makes misrepresentations, which if untrue, could constitute a
material misrepresentation. Which of the following fits that description?
a. "This is the one that I would buy."
b. "This is the best tablet on the market."
c. "These tires will wear like iron."
d. "This car has a new engine." - ✔✔d. "This car has a new engine."
✔✔Which of the following would be material to the sale of a racehorse?
a. The horse's coloring is chestnut.
b. The horse's running time in the last race was the fastest in the circuit.
c. The horse was ridden by Josh Jockey in the last race.
d. All of these are correct. - ✔✔b. The horse's running time in the last race was the
fastest in the circuit.
✔✔When only one party is mistaken as to a fact or facts of the transaction, it is termed:
a. negligent misrepresentation.
b. unilateral mistake.
c. subjective concealment.
d. mutual mistake. - ✔✔b. unilateral mistake.
✔✔A resulting contract is void when it is brought about by:
a. fraud in the execution.
b. fraud in the inducement.
c. innocent misrepresentation.
d. All of these are correct. - ✔✔a. fraud in the execution.
,✔✔Patrick held a baseball bat to Eric's head to compel him to sign a contract
advantageous to Patrick. This contract was entered under:
a. false representation.
b. improper threats.
c. physical duress.
d. undue influence. - ✔✔c. physical duress.
✔✔Annie wants to buy a vehicle that will tow a camper. She gives the specific
measurements and weight of the trailer to the salesman. The salesman tells her that the
SUV Annie sees on the car lot would be just perfect to tow the trailer. Annie test drives
the vehicle and then buys it. In this case:
a. Annie was not justified in relying upon the salesman's representation that the car
would tow the trailer.
b. the element of scienter is missing.
c. the salesman is in a confidential relationship with Annie.
d. Annie has a valid cause of action for fraud. - ✔✔a. Annie was not justified in relying
upon the salesman's representation that the car would tow the trailer.
✔✔Stephanie induces Wanda to purchase 100 shares in Zazzy Corporation at a price
of $100 per share. Stephanie tells Wanda that she paid $150 for them the previous
month. In fact Stephanie only paid $50. How can this representation of a past event be
characterized?
a. The representation of a past event is a misrepresentation of fact.
b. The representation is a misrepresentation of law.
c. The fact that was misrepresented was not material.
d. This is a mutual mistake of fact. - ✔✔a. The representation of a past event is a
misrepresentation of fact.
✔✔Francisco is a concert violinist who is scheduled to perform at the Kennedy Center
for the first time. He buys what he is told is a Stradivarius violin from a well-known,
reputable dealer in quality violins, and he pays the going rate for a Stradivarius. He later
learns the violin is an imitation, sold by the dealer who was trying to make quick money.
In this case:
a. Francisco has made a unilateral mistake and cannot avoid the contract.
b. the dealer has committed fraud in the inducement.
c. the sale is voidable by the seller for mutual mistake.
d. the sale may be rescinded, because the dealer has made a nonfraudulent
misrepresentation. - ✔✔b. the dealer has committed fraud in the inducement.
✔✔Baxter, a plumber, wants to submit a bid on a city sewer project. He computes the
cost, but mistakenly omits the cost of one item. Accordingly, he submits a bid of
,$430,000 to the city. The next highest bid is $675,000, and the rest of the bids are even
higher. The city is happy to have such a low bid, so it accepts Baxter's bid and awards
him the contract for the job, even though the city engineer is of the opinion the job
cannot be done for less than $650,000. In this case:
a. Baxter must perform for the agreed upon price, because he has made a unilateral
mistake.
b. the city was aware of Baxter's mistake. When it accepted the bid, with knowledge of
Baxter's mistake, the city sought to take an unconscionable advantage of Baxter's error.
c. there is a case of mutual mistake.
d. All of these are correct. - ✔✔b. the city was aware of Baxter's mistake. When it
accepted the bid, with knowledge of Baxter's mistake, the city sought to take an
unconscionable advantage of Baxter's error.
✔✔Sam agrees to sell Gina a BMW automobile, both believe to be inoperable, purely
for parts. The contract price is $500. Prior to the delivery of the BMW, Sam discovers
that the car was simply out of fuel, runs like a dream, and refuses to deliver the
automobile to Gina. The value of the operable BMW is now at $3,000. if the court allows
Sam to rescind the contract, what would be the reason?
a. This is a case of unilateral mistake on Sam's part.
b. This is a case of material mistake by both parties.
c. Sam was under duress.
d. All of these are correct. - ✔✔b. This is a case of material mistake by both parties.
✔✔Sam agrees to sell Gina a BMW automobile, both believe to be inoperable, purely
for parts. The contract price is $500. Prior to the delivery of the BMW, Sam discovers
that the car was simply out of fuel, runs like a dream, and refuses to deliver the
automobile to Gina. The value of the operable BMW is now at $3,000. If the court allows
Sam to rescind the contract, what would be the reason?
a. All of these are correct.
b. This is a case of unilateral mistake on Sam's part.
c. Sam was under duress.
d. This is a case of material mistake by both parties. - ✔✔d. This is a case of material
mistake by both parties.
✔✔Mike, a 75-year-old mechanic, returned Carrie her car after fixing the brakes. Mike
told Carrie: "I put some new brakes on her—she should brake with complete ease!"
When Carrie drives away, she cannot stop her car and crashes into a dumpster. It is
later discovered that Mike failed to reconnect one of the brake lines. There is no
indication that Mike knew that he failed to reconnect the brake line. If Carrie sues Mike
for fraud, and the court sides with Mike, what would be the court's reason?
a. Mike's statement was not a fact.
b. Mike was puffing.
, c. Mike lacked scienter because he did not make the statement with the intent to
deceive.
d. Carrie did not experience duress. - ✔✔c. Mike lacked scienter because he did not
make the statement with the intent to deceive.
✔✔Moe is Larry's attorney. Larry is a high school dropout with a tenth-grade education
and no job. Moe graduated from an elite law school and is a highly-skilled attorney.
Larry recently inherited a substantial amount of money from his mother. Rather than
continue to utilize his late mother's financial management company (Golden Wealth),
Moe successfully persuades Larry--after hours of closed door meetings and very high-
level talks about the stock market, tax law, and legal jargon--to move his money from
Golden Wealth and enter into a 10-year management agreement with Stooge Wealth
Management, which is owned by Moe's best friend Curly. If Larry seeks to later void his
agreement with Stooge Wealth Management, what would be his winning argument?
a. Larry experienced unilateral mistake.
b. Moe exerted undue influence on Larry to switch from Golden Wealth to Stooge
Wealth.
c. Larry was under duress to enter into an agreem - ✔✔b. Moe exerted undue influence
on Larry to switch from Golden Wealth to Stooge Wealth.
✔✔Debra delivers a package to Jackie and requests Jackie to sign a receipt for the
package, holds out a simple sheet of paper that says "Receipt," and shows a line where
Jackie is supposed to sign. The line, which appears to be at the bottom of the receipt, is
actually a promissory note for a $10,000 loan. Jackie signed the line, as indicated by
Debra and did not know that she was signing a note. This scenario is an example of:
a. Undue Influence.
b. Fraud in the execution.
c. Fraud in the inducement.
d. Duress. - ✔✔b. Fraud in the execution.
✔✔Maggie owns a valuable show dog, which she knows is suffering from a disease
only discoverable by a competent veterinarian. Maggie offers to sell this show dog to
Naomi but does not inform her about the dog's condition. Naomi, who is not a
veterinarian, makes a reasonable examination of the dog and concludes that the dog is
in normal condition and purchases it from Maggie. If Naomi later discovers that the
show dog suffers from the disease, can he have the sale set aside?
a. None of these answers are correct.
b. Yes, because the dog has a hidden defect that would not be discovered in an
ordinary examination and Maggie failed to disclose it.
c. No, because Naomi should have conducted a more rigorous examination of the dog.
QUESTIONS SET A+
✔✔Sometimes a party makes misrepresentations, which if untrue, could constitute a
material misrepresentation. Which of the following fits that description?
a. "This is the one that I would buy."
b. "This is the best tablet on the market."
c. "These tires will wear like iron."
d. "This car has a new engine." - ✔✔d. "This car has a new engine."
✔✔Which of the following would be material to the sale of a racehorse?
a. The horse's coloring is chestnut.
b. The horse's running time in the last race was the fastest in the circuit.
c. The horse was ridden by Josh Jockey in the last race.
d. All of these are correct. - ✔✔b. The horse's running time in the last race was the
fastest in the circuit.
✔✔When only one party is mistaken as to a fact or facts of the transaction, it is termed:
a. negligent misrepresentation.
b. unilateral mistake.
c. subjective concealment.
d. mutual mistake. - ✔✔b. unilateral mistake.
✔✔A resulting contract is void when it is brought about by:
a. fraud in the execution.
b. fraud in the inducement.
c. innocent misrepresentation.
d. All of these are correct. - ✔✔a. fraud in the execution.
,✔✔Patrick held a baseball bat to Eric's head to compel him to sign a contract
advantageous to Patrick. This contract was entered under:
a. false representation.
b. improper threats.
c. physical duress.
d. undue influence. - ✔✔c. physical duress.
✔✔Annie wants to buy a vehicle that will tow a camper. She gives the specific
measurements and weight of the trailer to the salesman. The salesman tells her that the
SUV Annie sees on the car lot would be just perfect to tow the trailer. Annie test drives
the vehicle and then buys it. In this case:
a. Annie was not justified in relying upon the salesman's representation that the car
would tow the trailer.
b. the element of scienter is missing.
c. the salesman is in a confidential relationship with Annie.
d. Annie has a valid cause of action for fraud. - ✔✔a. Annie was not justified in relying
upon the salesman's representation that the car would tow the trailer.
✔✔Stephanie induces Wanda to purchase 100 shares in Zazzy Corporation at a price
of $100 per share. Stephanie tells Wanda that she paid $150 for them the previous
month. In fact Stephanie only paid $50. How can this representation of a past event be
characterized?
a. The representation of a past event is a misrepresentation of fact.
b. The representation is a misrepresentation of law.
c. The fact that was misrepresented was not material.
d. This is a mutual mistake of fact. - ✔✔a. The representation of a past event is a
misrepresentation of fact.
✔✔Francisco is a concert violinist who is scheduled to perform at the Kennedy Center
for the first time. He buys what he is told is a Stradivarius violin from a well-known,
reputable dealer in quality violins, and he pays the going rate for a Stradivarius. He later
learns the violin is an imitation, sold by the dealer who was trying to make quick money.
In this case:
a. Francisco has made a unilateral mistake and cannot avoid the contract.
b. the dealer has committed fraud in the inducement.
c. the sale is voidable by the seller for mutual mistake.
d. the sale may be rescinded, because the dealer has made a nonfraudulent
misrepresentation. - ✔✔b. the dealer has committed fraud in the inducement.
✔✔Baxter, a plumber, wants to submit a bid on a city sewer project. He computes the
cost, but mistakenly omits the cost of one item. Accordingly, he submits a bid of
,$430,000 to the city. The next highest bid is $675,000, and the rest of the bids are even
higher. The city is happy to have such a low bid, so it accepts Baxter's bid and awards
him the contract for the job, even though the city engineer is of the opinion the job
cannot be done for less than $650,000. In this case:
a. Baxter must perform for the agreed upon price, because he has made a unilateral
mistake.
b. the city was aware of Baxter's mistake. When it accepted the bid, with knowledge of
Baxter's mistake, the city sought to take an unconscionable advantage of Baxter's error.
c. there is a case of mutual mistake.
d. All of these are correct. - ✔✔b. the city was aware of Baxter's mistake. When it
accepted the bid, with knowledge of Baxter's mistake, the city sought to take an
unconscionable advantage of Baxter's error.
✔✔Sam agrees to sell Gina a BMW automobile, both believe to be inoperable, purely
for parts. The contract price is $500. Prior to the delivery of the BMW, Sam discovers
that the car was simply out of fuel, runs like a dream, and refuses to deliver the
automobile to Gina. The value of the operable BMW is now at $3,000. if the court allows
Sam to rescind the contract, what would be the reason?
a. This is a case of unilateral mistake on Sam's part.
b. This is a case of material mistake by both parties.
c. Sam was under duress.
d. All of these are correct. - ✔✔b. This is a case of material mistake by both parties.
✔✔Sam agrees to sell Gina a BMW automobile, both believe to be inoperable, purely
for parts. The contract price is $500. Prior to the delivery of the BMW, Sam discovers
that the car was simply out of fuel, runs like a dream, and refuses to deliver the
automobile to Gina. The value of the operable BMW is now at $3,000. If the court allows
Sam to rescind the contract, what would be the reason?
a. All of these are correct.
b. This is a case of unilateral mistake on Sam's part.
c. Sam was under duress.
d. This is a case of material mistake by both parties. - ✔✔d. This is a case of material
mistake by both parties.
✔✔Mike, a 75-year-old mechanic, returned Carrie her car after fixing the brakes. Mike
told Carrie: "I put some new brakes on her—she should brake with complete ease!"
When Carrie drives away, she cannot stop her car and crashes into a dumpster. It is
later discovered that Mike failed to reconnect one of the brake lines. There is no
indication that Mike knew that he failed to reconnect the brake line. If Carrie sues Mike
for fraud, and the court sides with Mike, what would be the court's reason?
a. Mike's statement was not a fact.
b. Mike was puffing.
, c. Mike lacked scienter because he did not make the statement with the intent to
deceive.
d. Carrie did not experience duress. - ✔✔c. Mike lacked scienter because he did not
make the statement with the intent to deceive.
✔✔Moe is Larry's attorney. Larry is a high school dropout with a tenth-grade education
and no job. Moe graduated from an elite law school and is a highly-skilled attorney.
Larry recently inherited a substantial amount of money from his mother. Rather than
continue to utilize his late mother's financial management company (Golden Wealth),
Moe successfully persuades Larry--after hours of closed door meetings and very high-
level talks about the stock market, tax law, and legal jargon--to move his money from
Golden Wealth and enter into a 10-year management agreement with Stooge Wealth
Management, which is owned by Moe's best friend Curly. If Larry seeks to later void his
agreement with Stooge Wealth Management, what would be his winning argument?
a. Larry experienced unilateral mistake.
b. Moe exerted undue influence on Larry to switch from Golden Wealth to Stooge
Wealth.
c. Larry was under duress to enter into an agreem - ✔✔b. Moe exerted undue influence
on Larry to switch from Golden Wealth to Stooge Wealth.
✔✔Debra delivers a package to Jackie and requests Jackie to sign a receipt for the
package, holds out a simple sheet of paper that says "Receipt," and shows a line where
Jackie is supposed to sign. The line, which appears to be at the bottom of the receipt, is
actually a promissory note for a $10,000 loan. Jackie signed the line, as indicated by
Debra and did not know that she was signing a note. This scenario is an example of:
a. Undue Influence.
b. Fraud in the execution.
c. Fraud in the inducement.
d. Duress. - ✔✔b. Fraud in the execution.
✔✔Maggie owns a valuable show dog, which she knows is suffering from a disease
only discoverable by a competent veterinarian. Maggie offers to sell this show dog to
Naomi but does not inform her about the dog's condition. Naomi, who is not a
veterinarian, makes a reasonable examination of the dog and concludes that the dog is
in normal condition and purchases it from Maggie. If Naomi later discovers that the
show dog suffers from the disease, can he have the sale set aside?
a. None of these answers are correct.
b. Yes, because the dog has a hidden defect that would not be discovered in an
ordinary examination and Maggie failed to disclose it.
c. No, because Naomi should have conducted a more rigorous examination of the dog.
