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Exam 14: Voluntary Consent

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Question 1

Multiple Choice

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Raylene,who is Seth's guardian,convinces him to buy a certain parcel of land from Trevor at a greatly inflated price. Raylene may be liable for

A) duress.
B) fraud.
C) mistake.
D) undue influence.

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Question 2

Multiple Choice

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Drake enters into a contract with Eve,who claims to have access to a stock-trading algorithm that will multiply an investment many times over. When the results do not match this promise,Drake learns that Eve does not have access to any unique software and files a suit against her,alleging fraud. Proof of an injury is required to

A) recover damages.
B) rescind the contract.
C) undo Eve's influence.
D) punish the defendant.

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Question 3

Multiple Choice

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County Title Company processes information furnished by others to transfer title to real estate from a seller to a buyer. In performing this task for a sale of land from James to Kate,the furnished information is mistaken. -Refer to Fact Pattern 14-3. The contract between James and Kate that includes the mistake may be rescinded

Misrepresentation of law ordinarily entitles a party to relief from a contract.

In selling a commercial building,Birdie tells Colt that theproperty has a certain capacity,making it suitable for a nightclub. Birdie knows nothing about the capacity of the building,but it is not as she specifies. Colt buys the building. -Refer to Fact Pattern 14-4. Under these circumstances,Colt's best course of action is most likely to

Misrepresentation of a material fact is an element of fraud.

Digital Storage,Inc.,offers to sell provide cloud-computing services to Entrepreneur Enterprises,Inc.,but mistakenly transposes some of the digits in the price so that $15,400 appears in the offer as $14,500. Entrepreneur Enterprisesaccepts the written offer. -Refer to Fact Pattern 14-1. Digital Storage'sbest defense against enforcement of the contract is that Entrepreneur Enterprisesknew

Dumont threatens physical harm to force Eddie to sell his business,Citywide Vending,Inc.,to Dumont for a below-market price. This is

Scienterclearly exists if a party knows a fact is not as stated.

Garth owns two all-terrain vehicles (ATVs) ,worth $1,000 and $500,re-spec-tively. Helen agrees to buy "Garth's ATV" for $750. Garth believes,in good faith,that he is selling the $500 ATV. Helen believes,in good faith,that she is buying the $1,000 ATV. In this situation

When both parties to a contract are mistaken about the same material fact,the contract cannot be rescinded.

Voluntary consent may be lacking because of misrepresentation but not because of a mistake.

Dixon agrees to sell to Elmore,for $1,500,a remote parcel of land. They believe the land to be worthless,but beneath it is a shale rock containing oil. A court would

For a party to a contract to receive relief from either a unilateral or a bilateral mistake,the mistake must involve a material fact.

When the dominant party in a fiduciary relationship benefits from that relationship,a presumption of undue influence arises.

Winona enters into a contract with Peyton to buy Peyton's land based on Peyton's assertion that the land is legally open to development. After the sale,Winona learns what Peyton knew previously-only a small section of the land can be built on. A local law prohibits construction on the rest of the property. Winona can

Courts typically set aside contracts because a party did not volunteer pertinent information.

Creighton applies to BigData Corporation for a position as a software engineer. Creighton has no training in computers or programming and no background as an engineer. After Creighton is hired,BigData learns the truth. BigData can

Health Source,Inc.,offers to buy Medico Equipment & Supplies Corporation. On June 1,Medico gives Health Source copies of Medico's financial statements for the pre-vious year. The statements show an inventory of $10 million. On June 15,Medico discovers that the previous year's inventory is overstated by $500,000,but does not inform Health Source. On July 1,Health Source,relying on the fi-nancial statements,buys Medico. On July 10,Health Source discovers the inven-tory over-statement. Can Health Source succeed in a suit against Medico? On what basis?

Kari,a real estate agent,assures Linc that a certain parcel of commercial property fronts on the most highly trafficked street in Metro City. Linc buys the property and then discovers that the street has no more traffic than any other in its vicinity. Linc is most likely a victim of