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| 1 | |
Unreasonable delay in notifying the other party of one's decision to rescind a contract may result in the contract being ratified. |
| | A) | True |
| | B) | False |
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| 2 | |
In order to make a contract voidable, misrepresentations must be intentionally deceptive. |
| | A) | True |
| | B) | False |
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| 3 | |
Nondisclosure of a fact can have the same effect as a false assertion in making a contract voidable. |
| | A) | True |
| | B) | False |
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| 4 | |
In order to avoid a contract due to mutual mistake, the effect of the mistake must be material. |
| | A) | True |
| | B) | False |
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| 5 | |
Since all contracts involve persuasion, modern courts do not recognize "undue influence" as grounds for avoiding a contract. |
| | A) | True |
| | B) | False |
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| 6 | |
Only physical duress can be used to avoid a contract. |
| | A) | True |
| | B) | False |
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| 7 | |
Which of the following statement(s) is/are true? |
| | A) | The available remedy for innocent misrepresentation is rescission. |
| | B) | Both fraud and misrepresentation require an intent to deceive. |
| | C) | Both fraud and misrepresentation require actual and justifiable reliance in order to avoid a contract. |
| | D) | A and C |
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| 8 | |
Rob, an elderly man, is dependent on his housekeeper, Larry, to care for him. Larry persuades Rob to withdraw $100,000 from the bank and make an interest-free loan to him. Rob's daughter, Erica, sued Larry on behalf of her father to avoid the transaction. Assume Erica has standing to act on behalf of her father, Rob. If the court grants Erica's request, it is most likely under the doctrine of: |
| | A) | Unilateral mistakes. |
| | B) | Undue influence. |
| | C) | Economic duress. |
| | D) | Misrepresentation. |
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| 9 | |
Lala, a Los Angeles clothing manufacturer, orders fabric needed for its spring collection from Cloth Corp. Knowing that Lala needs the fabric urgently, Cloth Corp. threatens to withhold delivery unless Lala agrees to pay extra for the material. Which of the following statements is true regarding the contract between Cloth Corp. and Lala? |
| | A) | Lala must pay the extra price for the fabric upon its delivery. |
| | B) | Lala could avoid paying the extra price by asserting that it was under "economic duress" at the time of the agreement to modify the price. |
| | C) | Lala is the victim of undue influence. |
| | D) | None of the above |
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| 10 | |
Bob told Philip that he needed to sign a contract to sell his home. If Philip failed to do so, Bob said that he would not give Philip money to pay for Philip's credit card bills. Philip signed the contract. |
| | A) | Such action amounts to duress. |
| | B) | Such action amounts to economic duress. |
| | C) | Such action amounts to undue influence. |
| | D) | None of the above |
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