Wayground logo

Free Printable Worksheets

Font size

S
M
L
XL
Worksheets

Chapter 11: Prepare & Apply

Total questions: 22

Worksheet time: 11mins

Name
Class
Date
1.

The law very carefully scrutinizes contracts between those in a relationship of trust and confidence that is likely to permit one party to take unfair advantage of the other. Which of the following is not an example of that type of relationship?

a)

Hair dresser and client.

b)

Doctor and patient.

c)

Agent and principal.

d)

Parent and child.

2.

To establish fraud, the misrepresentation must have been known by the one making it to be false and must be made with an intent to deceive. That knowledge is known as:

a)

All of these are correct.

b)

scienter.

c)

negligent misrepresentation.

d)

sales puffery.

3.

A person should not be held to an agreement he has not entered voluntarily. Accordingly, the law will not enforce any contract induced by:

a)

All of these are correct.

b)

duress.

c)

mistake.

d)

puffery.

4.

A person is not entitled to relief from fraud, unless she can show that she:

a)

was physically forced to comply.

b)

All of these are correct.

c)

justifiably relied on the misrepresentation.

d)

was unduly influenced.

5.

Contracts induced by threats of ________ are not voidable, unlike threats of ________ regardless of whether the coerced party had committed an unlawful act.

a)

tortious conduct; civil prosecution

b)

None of these are correct.

c)

criminal prosecution; civil prosecution

d)

civil prosecution; criminal prosecution

6.

_______ is an intentional misrepresentation of material fact by one party to the other, who consents to enter into a contract in justifiable reliance on the misrepresentation. Fraud in the inducement renders the contract _______ by the defrauded party.

a)

Fraud by concealment; void

b)

Fraud in the inducement; voidable

c)

Fraud in the execution; voidable

d)

Silence; void

7.

Which of the following, if any, are requisites for fraud in the execution?

a)

Signing party does not know the character or essential terms of the contract.

b)

Renders the transaction void.

c)

All of these are correct.

d)

False representation as to the very nature of the contract.

8.

Sometimes the law imposes a duty of disclosure. When a fiduciary is silent, silence may constitute fraud. A fiduciary is one who:

a)

is in a confidential relationship who owes a duty of trust and loyalty to another.

b)

All of these are correct.

c)

must deal at arm's length with the other party to the relationship.

d)

has the same duty of disclosure to the other party to the relationship as one who is not a fiduciary.

9.

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)

"These tires will wear like iron."

c)

"This car has a new engine."

d)

"This is the best tablet on the market."

10.

Which of the following would be material to the sale of a racehorse?

a)

The horse was ridden by Josh Jockey in the last race.

b)

All of these are correct.

c)

The horse's coloring is chestnut.

d)

The horse's running time in the last race was the fastest in the circuit.

11.

When only one party is mistaken as to a fact or facts of the transaction, it is termed:

a)

mutual mistake.

b)

unilateral mistake.

c)

negligent misrepresentation.

d)

subjective concealment.

12.

A resulting contract is void when it is brought about by:

a)

fraud in the execution.

b)

All of these are correct.

c)

fraud in the inducement.

d)

innocent misrepresentation.

13.

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)

improper threats.

b)

undue influence.

c)

physical duress.

d)

false representation.

14.

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 has a valid cause of action for fraud.

b)

Annie was not justified in relying upon the salesman's representation that the car would tow the trailer.

c)

the salesman is in a confidential relationship with Annie.

d)

the element of scienter is missing.

15.

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 fact that was misrepresented was not material.

b)

This is a mutual mistake of fact.

c)

The representation is a misrepresentation of law.

d)

The representation of a past event is a misrepresentation of fact.

16.

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)

the sale is voidable by the seller for mutual mistake.

b)

the dealer has committed fraud in the inducement.

c)

the sale may be rescinded, because the dealer has made a nonfraudulent misrepresentation.

d)

Francisco has made a unilateral mistake and cannot avoid the contract.

17.

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)

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.

c)

Baxter must perform for the agreed upon price, because he has made a unilateral mistake.

d)

there is a case of mutual mistake.

18.

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)

All of these are correct.

c)

This is a case of material mistake by both parties.

d)

Sam was under duress.

19.

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)

Carrie did not experience duress.

b)

Mike’s statement was not a fact.

c)

Mike lacked scienter because he did not make the statement with the intent to deceive.

d)

Mike was puffing.

20.

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)

Moe exerted undue influence on Larry to switch from Golden Wealth to Stooge Wealth.

b)

Larry was under duress to enter into an agreement with Stooge Wealth Management.

c)

Larry experienced unilateral mistake.

d)

Moe and Larry experienced mutual mistake.

21.

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)

Duress.

b)

Undue Influence.

c)

Fraud in the execution.

d)

Fraud in the inducement.

22.

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)

No, because Naomi should have conducted a more rigorous examination of the dog.

b)

None of these answers are correct.

c)

Yes, because the dog has a hidden defect that would not be discovered in an ordinary examination and Maggie failed to disclose it.

d)

No, because Maggie and Noami already agreed to the sale.