Contract Formation Quiz 14

What is required from both parties for the formation of a contract according to the text?

• A) A written agreement

• B) A mutual mistake of fact

• C) Voluntary consent

• D) A mistake of value

What type of mistake is referred to in the law as a "mistake of fact"?

• A) A mistake about the future market value of the contract's subject

• B) A mistake about the basic assumptions upon which the contract was made

• C) A mistake about having second thoughts after entering into a contract

• D) A mistake about the wisdom of entering into the contract

What is the impact of a mistake of value on the validity or enforceability of a contract?

• A) It makes the contract voidable

• B) It has no impact

• C) It makes the contract void

• D) It leads to automatic termination of the contract

What happens to a contract when a mutual mistake of fact is made?

• A) The contract is enforceable

• B) The contract is voidable by the party that is adversely affected

• C) The contract remains unaffected

• D) The contract is automatically terminated

What is a unilateral mistake of fact in the context of contracts?

• When both parties have made a mistake about a fundamental aspect of the contract

• When one party makes a mistake about a fundamental aspect of the contract and the other party is unaware of the mistake

• When one party intentionally deceives another party during the formation of a contract

• When both parties agree to the terms of the contract under false pretenses

Which of the following factors do courts typically look at to determine if a contract should not be enforced due to a unilateral mistake?

• The amount of time that has passed since the contract was signed

• The non-mistaken party's ability to perform the contract without the mistaken party

• The potential emotional distress caused to the non-mistaken party

• The extent to which the non-mistaken party knew or had reason to know of the mistake

What is fraud in the context of contract law?

• A unilateral mistake of fact by one party that the other party does not know about

• A mutual mistake of fact by both parties that leads to an agreement

• An intentional tort that involves making false misrepresentations of fact to another party for the purpose of misleading them

• A situation where both parties enter into a contract without fully understanding the terms

What can the misled party do if a contract is formed under fraud?

• The misled party must fulfill the contract as it is legally binding

• The misled party can void the contract if the fraud involves a material fact related to the essential terms of the contract

• The misled party can only seek to reform the contract to correct the mistake

• The misled party is required to pay punitive damages to the other party

What is required for a party to prove negligent or innocent misrepresentation in a contract negotiation?

• A) The party must show that the other party intentionally provided false information.

• B) The party must demonstrate that the other party knew the statement was false and made no effort to correct it.

• C) The party must show that the other party made a false statement without knowing it was false, but failed to make reasonable efforts to verify its truth or falsity.

• D) The party must prove that the other party made a false statement with the intent to deceive.

What is the legal concept called when a contract is voidable by the victim due to threats made by the other party?

• A) Misrepresentation

• B) Duress

• C) Coercion

• D) Fraud