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Exam 13: Genuineness of Assent and Undue Influence

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Question 21

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________ is an action to undo a contract.

A) Rescission
B) Recession
C) Restitution
D) Inception

E) B) and D)
F) B) and C)

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Question 22

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Explain undue influence with an example.

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Undue influence occurs when one person (...

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Question 23

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Innocent misrepresentation is treated as a unilateral mistake.

Contracts involving fraud in inducement are ________.

Fraud in inducement occurs when the party does not know the terms of the contract.

Assent of a party to a contract may be manifested in any manner sufficient to show agreement, including conduct.

Jeffrey became a victim of fraud when he entered a pyramid scheme which turned out to be a scam. In order to claim damages, Jeffrey has to prove which of the following?

Alice offers Richard a chance to work in her affiliate marketing program which, she claims, will make him a millionaire in three months. Richard makes the "mandatory investment" of $12,000 and becomes an affiliate. Soon, he realizes that such a program does not exist and that Alice has disappeared with the money. This is an instance of ________.

To prove fraud, which of the following elements must be shown?

If there has been a mutual mistake of material fact, the contract cannot be rescinded.

Explain the three kinds of mistakes that can be made by either party while entering a contract. When are contracts involving mistakes rescinded?

For a situation to be considered "undue influence," the persuasion by the wrongdoer must overcome the free will of the innocent party.

When Stella Finman found out that she was terminally ill, she drafted a will leaving all her property to her son. During her period of illness, Stella was financially and emotionally supported by her lawyer as her son was mostly away. When the will was read upon her death, it said that her lawyer would get a 20 percent stake in Finman Corp., a company Stella owned. Upon investigation, it was revealed that Stella's lawyer took advantage of Stella's weakness and persuaded her to change the contractual terms. This is an instance of ________.

Which of the following is true of misrepresentation?

Joe buys a trailer from a used-car dealership. On enquiry, the dealer tells him that the trailer is in great condition. However, three days later, the trailer breaks down. Investigation by Joe reveals that the trailer had seven previous owners and that the engine has been replaced thrice. An automobile expert tells Joe that the trailer is dangerous. Which of the following frauds would the dealer be liable for?

Harry finds an old stereo in his attic. He sells the stereo to Jake for $50 telling him that it is fully functional, which Harry thinks is true. However, it turns out to be broken. Which of the following statements is true in this context?

________ is a mistake made by both parties concerning an object that is important to the subject matter of a contract.

Does threatening a lawsuit unless someone signs a contract constitute duress? Why or why not? Explain your answer for both criminal and civil lawsuits.

Taking advantage of another person's mental, emotional, or physical weakness and unduly persuading that person to enter into a contract constitutes duress.

Which of the following scenarios makes Tim liable for undue influence?