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Exam 5: Genuineness of Assent

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Question 41

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Sam wants to sell his stereo system because one side of his amplifier occasionally doesn't work properly and the cost of repair is so high that Sam wants to get a new stereo.Otherwise,it works well and the sound quality is very good.Sam places an advertisement in the newspaper and Bob comes to look at the stereo.Bob tries it out and likes what he hears.The following conversation then takes place: Bob: How does it work? Sam: Listen for yourself.Isn't that sound great? Bob: Yes,it is.Have you ever had to have it repaired? Sam: It's never been repaired ...it's just as it came from the factory.Try the CD,the cassette tape,and the tuner.You'll see they all work. Bob plays a cassette tape and after a few minutes,the sound on the left channel sounds distorted. Bob: This was sounding great,then all of a sudden it didn't sound right.I know a lot about stereos and that just didn't sound the way it should. Sam: Try the CD and I'll get another tape. Bob plays the CD and no further problem occurs.Bob then tries a different cassette tape and no further problem occurs.Bob spends an hour or so playing and testing the stereo system.Sam and Bob then negotiate a price.Bob pays and takes the stereo home only to discover the problem.Bob wants to get out of the contract.Discuss whether Bob can get out of the contract and get his money back.

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The fraud elements are present...

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Question 42

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Barb bought a 1968 Plymouth Valiant with 24,000 miles (the correct mileage) on it from Jolly John's Gently Used Car Sales.John told Barb that this car was used by a little old lady who only used it to go to church on Sundays.A couple of months later,Barb learned that the little old lady's Sunday trips were to the bingo parlor,not to church,and Barb learns that John knew this all along.Based on this information,Barb can probably:

A) Get out of the contract on the basis of fraud.
B) Get out of the contract on the basis of undue influence.
C) Get out of the contract on the basis of unilateral mistake.
D) Get out of the contract on the basis of duress.
E) Not get out of the contract based on any of these reasons.

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Question 43

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A prediction,if proven to be incorrect,can form the basis of a fraud case.

What is the effect of one party being mistaken about the subject matter of a contract?

Ordinarily,silence is not a misrepresentation.

Generally,a unilateral mistake allows either party to rescind the contract if the other party knew or should have known that a mistake was made.

Neil owned a violin that he wanted to sell and Linda wanted to purchase.Both parties thought the violin to be a rare Stradivarius violin.They agreed on a price of $200,000.Later,it was discovered that the violin was just an ordinary violin,the value of which was only $10,000.Linda sues to recover her money.Discuss whether Linda is entitled to the return of her money or any other remedies.Fully discuss the legal theories involved.

Where two parties contract for the purchase and sale of an ordinary item,such as a desk,that unknown to both parties is a rare and valuable example of that item,this is:

A plaintiff in a fraud case must prove which of the following?

Contracts involving fraud and misrepresentation are:

When only one party to a contract is mistaken about a material fact that is the subject matter of the contract,that party will not be permitted to rescind the contract.

Sandy Student is having difficulties in her advanced accounting class this semester.Sandy,who is a 21-year-old senior,is out consuming green beer on St.Patrick's Day and runs into Professor Debit,who was Sandy's Principles of Accounting professor.Sandy and Professor Debit discuss Sandy's current problems in accounting and have the following conversation: Sandy: I just don't get it.I really know the material,I don't know how I got a "D" on the first exam.Professor Consolidation's exams are so hard. Debit: I know that.I know a little about how Professor Consolidation makes up those exams.We've team-taught that course in the past.And,we see each other often.I'll tell you what I can do if you like.Before each of the remaining exams,we'll get together and I'll tell you exactly what you need to know to do well.We'll take as long as you want on a Saturday for a flat fee of $100. Sandy: That sounds good except for one thing.I'm flat broke.I don't know if you remember that I work weekends at the Divide Basin Ski Area checking lift tickets.How about if I pay you $40 each exam,but allow you to ski without checking your lift ticket anytime I am working.Just make sure you have an old lift ticket on so everything looks proper. Debit: It's a deal.Let's get another pitcher of this Old Stumpshovel Green Beer.I don't know if it's green from food coloring or from age,but it's finally starting to go down pretty smoothly. The next exam comes along and Professor Debit spends several hours on a Saturday with Sandy.Sandy does better on that exam,but not as well as she had hoped because unknown to Debit or Sandy,Professor Consolidation had changed the format of his exams.The following week,Professor Debit goes skiing.As agreed,he has an old lift ticket visible,and Sandy lets Debit through the line,but tells Debit,"You are going to have to get a ticket after you take this run.I didn't get an "A" on that exam,so I don't feel I owe you anything.Besides,I'm now afraid I may get caught." Professor Debit buys a lift ticket and skis the rest of the day.Debit cancels class Monday morning in order to meet with an attorney regarding a lawsuit against Sandy,who has not yet paid the $40 for the session.If you were Debit's lawyer,what would you tell Debit about the strengths and weaknesses of the case against Sandy? Among Sandy's claims is a claim that the mistake over the format of the exam should allow her to rescind the contract.

Which of the following statements is true regarding duress?

Mark was shopping for a used car in February.He went to AutoMegaWorld and test drove a used 2000 Tiger XL.While driving the car,he looked at the climate control center and noticed that the temperature lever was marked "cold" at one end in blue and "hot" in red at the other end.Mark assumed that the "cold" marking meant that the car had air conditioning.Mark wanted to finally have an air-conditioned car.The salesperson did not mention anything about whether this car was air conditioned,but while test-driving the car,Mark commented,"It will be great to have an air-conditioned car." The salesperson heard Mark and knew that the car did not have air conditioning,but said nothing.Mark bought the car.When Mark was showing his new car off to friends,one of them showed him that the car was not air conditioned.In this circumstance:

Sally is thinking about buying Linda's car.Linda knows that there is a leak in the brake line,and that after driving the car for a few minutes,the brake fluid will leak out and the car will have no brakes.Sally does not ask about it and Linda does not tell her.Sally buys the car,and while driving home,the brakes fail.Sally has an accident and the car is destroyed.Sally sues Linda for fraud to get her money back.Which is true?

The case that involved two ships,both of which were named "Peerless," is:

What is the underlying concern of the economic duress doctrine?

Kevin disconnects the odometer on his car and then drives it for another 15,000 miles after which he decides to sell it.When Linda inquires about the vehicle,Kevin says "the odometer indicates the car has only 20,000 miles on it." Kevin's statement is:

Fraud in the inception exists when the misrepresentation occurs at the beginning of negotiations.