Business Law And The Regulation Of Business International Edition 10th Edition By Richard – Test Bank

Chapter 11—Conduct Invalidating Assent

TRUE/FALSE

1. Marjorie has been cared for by her family physician for 35 years. She decides to assume the mortgage on his new clinic. The contract is automatically invalid because of undue influence.

ANS: F MSC: AACSB Reflective Thinking

2. At the marriage of her daughter, Lorna is given papers to sign, which the catering company says are the invoices for the food, service, and decorations. Underneath the invoices are a carbon and a contract of sale for a portion of the failing catering business. Lorna signs the papers; her signature is transferred to the sales contract. This is a void contract because it was entered by fraud in the execution.

ANS: T MSC: AACSB Reflective Thinking

3. Pat told her friends that her car got 35 miles to the gallon in the city when in reality it only got 20 miles per gallon. If Pat decides to sell the car and one of these friends decides to buy it, Pat is under no duty to tell the correct figure unless asked.

ANS: F MSC: AACSB Reflective Thinking

4. Physical compulsion and improper threats are the two basic types of duress.

ANS: T MSC: AACSB Analytic

5. Threats of resorting to a civil lawsuit to recover a debt does not constitute duress.

ANS: T MSC: AACSB Analytic

6. The law requires that to form a valid contract the agreement must be voluntary and knowing.

ANS: T MSC: AACSB Analytic

7. Acts constituting duress are necessarily crimes or torts in themselves.

ANS: F MSC: AACSB Analytic

8. Harry was told that he had to pay $50 for filing his claim in small claims court. He did. If the fee is really $40, he cannot recover the $10 because it is a unilateral mistake of fact.

ANS: F MSC: AACSB Reflective Thinking

9. Economic duress, such as that found in the case of Berardi v. Meadowbrook Mall Company, renders a contract void.

ANS: F MSC: AACSB Analytic

10. Undue influence is the taking of unfair advantage of a person by reason of a dominant position based upon a confidential relationship.

ANS: T MSC: AACSB Analytic