Chapter 7 & 8 Review

Question 1

A _____ is something that is important; it matters to one of the parties.

Answer 1

Material Fact

Question 2

Persons who are induced to enter into contracts by fraud can ____ the contract.

Answer 2

Recisnd

Question 3

A _____ has been made if both parties to a contract are mistaken about some important fact.

Answer 3

Bilateral Mistake

Question 4

Threatening a person’s business or income (finances) to cause that person to enter a contract without real consent is ______.

Answer 4

Economic Duress

Question 5

Unfair and improper persuasive pressure is ______.

Answer 5

Undue Influence

Question 6

Making a false representation by not saying something that should be said is ______.

Answer 6

Concealment

Question 7

Overcoming a person’s will by use of force or by threat of force is ____.

Answer 7

Duress

Question 8

Securing an unfair or unlawful gain through deliberate deception is _____.

Answer 8

Fraud

Question 9

A _____ is an innocent statement of untrue facts.

Answer 9

Misrepresentation

Question 10

A _____ error on the part of one of the parties to a contract.

Answer 10

Unilateral Mistake

Question 11

What is the difference between a unilateral mistake and a bilateral mistake?

Answer 11

Unilateral mistake is a mistake by one of the parties. Bilateral Mistake is a mistake on both of the parties.

Question 12

Who may avoid the contract that contains a bilateral mistake?

Answer 12

The contract may be voided by either of the parties.

Question 13

6 Elements of Fraud

Answer 13

1. Must be false representation of face
2. The party making the representation must know its’s false.
3. The false representation must be made with the intent that it be relied upon.
4. The innocent party must reasonably rely upon the false representation.
5. The innocent party must actually suffer some monetary loss.

Question 14

False Representation must Known to be False:

Answer 14

This element may be satisfied by proving actual knowledge

Or it may be proved by showing that the statement was made recklessly, without regard for its truth or falsity.

Question 15

False Representation Made with the Intent that it be relied upon:

Answer 15

The person making the misrepresentation must intend that the other party upon it as part of the contract negotiation’s.

Question 16

False Representation was Actually relied Upon:

Answer 16

The false representation must be reasonably relied upon by the other party at the time that it’s made.

Question 17

What are 2 different kinds of bilateral mistakes?

Answer 17

Mistakes as to the possibility of performance

Mistakes as to the Subject Matter

Question 18

What are remedies to innocent Misrepresentation?

Answer 18

Rescind of the contract

Injured party has no right to damages

Question 19

What is the exception to the mistake as to the Identity of the party?

Answer 19

Face To Face

Question 20

How many elements need to be present for a contract to be valid?

Answer 20

All 6

Question 21

How long is too long for a contract to be valid?

Answer 21

If there’s no time frame put into the the offer, it must be accepted with a reasonable amount of time.

Question 22

What is an option contract?

Answer 22

Agreement between two parties to facilitate a potential transaction involving an asset at a preset price and date.

Question 23

When would invitations to negotiate be considered actual offers?

Answer 23

When the offer is very specific

Example: The first 10 people to walk in will get a 25% discount.

Question 24

What is the Mirror Image Rule?

Answer 24

Principle of unconditional acceptance where the acceptance doesn’t change the terms of the original offer.

Question 25

What are the 3 basic elements of an offer?

Answer 25

Seriously Intended

Definite and Certain

Communicated to the offeree

Question 26

Is a contract with minors a valid contract?

Answer 26

No either minor can void the contract.