Chapter 7 Business Law 7.1

Avoidance of contracts affected by legal duress must be carried out promptly after the injured party discovers his or her assent was improperly obtained and occurred before ratification.

• True

• False

Contracts created or modified by duress are rescindable.

• True

• False

Which of the following is a threat that can create duress?

• threat to shoot the contracting party if she doesn't sign the contract

• threat to sue (without grounds) the contracting party if she doesn't modify the contract

• threat to report the contracting party to the IRS for tax evasion if she doesn't sign an agreement

• all of the above

In economic duress cases the courts look at the ___________________ and the victim's alternatives.

• threat

• material facts

• rescission

• ratification

A confidential relationship between parties to the contract must always be shown to prove undue influence.

• True

• False

Which of the following need not be done by the dominating party to prevent a claim of undue influence?

• act with total nonesty

• fully disclose all important facts

• insist the weaker party seek independent legal advice before contracting

• submit the contract to a judge for review.

Claims of duress, undue influence, mistake, fraud, misrepresentation, and others place the genuineness of _________________ to a contract's provisions in doubt.

• assent

• fraud

• valid

• mutual mistake