The Legal Environment Today Summarized Case Edition 8th Edition By Roger Miller – Test Bank

True / False

1. A material fact is a fact that a reasonable person would consider important when determining his or her course of action.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: Voluntary Consent
LEARNING OBJECTIVES: LO-1
NATIONAL STANDARDS: United States – AICPA: BB-Legal
United States – BUSPROG – Analytic – BUSPROG: Analytic
KEYWORDS: Bloom’s: Knowledge

2. Voluntary consent may be lacking because of misrepresentation but not because of a mistake.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
REFERENCES: Voluntary Consent
LEARNING OBJECTIVES: LO-1
NATIONAL STANDARDS: United States – AICPA: BB-Legal
United States – BUSPROG – Analytic – BUSPROG: Analytic
KEYWORDS: Bloom’s: Knowledge

3. Words or terms in contracts that are subject to more than one reasonable interpretation can lead to bilateral mistakes.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: Voluntary Consent
LEARNING OBJECTIVES: LO-1
NATIONAL STANDARDS: United States – AICPA: BB-Legal
United States – BUSPROG – Analytic – BUSPROG: Analytic
KEYWORDS: Bloom’s: Knowledge

4. Any party who does not receive what he or she considers a fair bargain can argue mistake.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
REFERENCES: Voluntary Consent
LEARNING OBJECTIVES: LO-1
NATIONAL STANDARDS: United States – AICPA: BB-Legal
United States – BUSPROG – Analytic – BUSPROG: Analytic
KEYWORDS: Bloom’s: Comprehension

5. A contract may not be enforceable if one party is aware that the other party made a mistake of fact.
a. True
b. False
ANSWER: True
POINTS: 1
REFERENCES: Voluntary Consent
LEARNING OBJECTIVES: LO-1
NATIONAL STANDARDS: United States – AICPA: BB-Legal
United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic

6. An innocent party does not need to suffer an injury to collect damages as a result of a misrepresentation.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
REFERENCES: Voluntary Consent
LEARNING OBJECTIVES: LO-1
NATIONAL STANDARDS: United States – AICPA: BB-Legal
United States – BUSPROG – Analytic – BUSPROG: Analytic
KEYWORDS: Bloom’s: Knowledge

7. Duress is a defense to the enforcement of a contract, but not a ground for rescission of a contract.
a. True
b. False
ANSWER: False
POINTS: 1
DIFFICULTY: Easy
REFERENCES: Voluntary Consent
LEARNING OBJECTIVES: LO-1
NATIONAL STANDARDS: United States – AICPA: BB-Legal
United States – BUSPROG – Analytic – BUSPROG: Analytic
KEYWORDS: Bloom’s: Knowledge

8. When the dominant party in a fiduciary relationship benefits from that relationship, a presumption of undue influence arises.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
REFERENCES: Voluntary Consent
LEARNING OBJECTIVES: LO-1
NATIONAL STANDARDS: United States – AICPA: BB-Legal
United States – BUSPROG – Analytic – BUSPROG: Analytic
KEYWORDS: Bloom’s: Knowledge

9. Misrepresentation of a material fact can occur by words or action.
a. True
b. False
ANSWER: True
POINTS: 1
REFERENCES: Voluntary Consent
LEARNING OBJECTIVES: LO-1
NATIONAL STANDARDS: United States – AICPA: BB-Legal
United States – BUSPROG: Reflective

10. Most courts require a showing of injury when an action is to rescind a contract for fraud.
a. True
b. False
ANSWER: False
POINTS: 1
REFERENCES: Voluntary Consent
LEARNING OBJECTIVES: LO-1
NATIONAL STANDARDS: United States – AICPA: BB-Legal
United States – BUSPROG: Reflective Thinking – BUSPROG: Analytic