Smith And Roberson’s Business Law International Edition 15th Edition By Richard A. Mann -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 PTS: 1

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. As Lorna signs the papers, her signature is applied to the sales contract. This is a void contract because it was entered by fraud in the execution.

ANS: T PTS: 1

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. When Pat decides to sell the car and one of her friends decides to buy it, Pat is under no duty to tell the correct figure unless asked.

ANS: F PTS: 1

4. If an agreement is not voluntary and knowing, it will be either void or voidable.

ANS: T PTS: 1

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

ANS: T PTS: 1

6. The difference between fraud and misrepresentation is that fraud involves malice while nonfraudulent misrepresentation is always innocent.

ANS: F PTS: 1

7. Rescission is usually permitted where the parties to a contract are both mistaken about a material fact.

ANS: T PTS: 1

8. Generally, whether or not the parties deal at arm’s length does not affect whether silence alone amounts to fraud.

ANS: F PTS: 1

9. Social coercion to enter into a contract cannot be a basis for avoidance of the contract.

ANS: F PTS: 1

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 PTS: 1

11. Fraud in the inducement will render an agreement void.

ANS: F PTS: 1