RETS / CHAPTER 10 / PART 2

Question 1

What are the three criteria of misrepresentation?

Answer 1

• *(1) statement must be false;
  (2) must have induced other party to enter into a contract; and (3) would have induced a reasonable person**

Question 2

What are the most common types of incapacity?

Answer 2

infancy, insanity, drunkenness, and the lack of capacity of a corporation.

Question 3

TRUE OR FALSE? Offer, acceptance, privity, certainty and duress are the only essential elements of a valid contract.

Answer 3

ANSWER: FALSE

A contract has SEVEN essentials.

They are: offer, acceptance, consideration, legal intention, capacity, legal object, genuine consent

Question 4

Both a buyer and a seller make a contract believing that what is being sold exists, but in fact, it has been destroyed. This fact is unknown to both parties. This is an example of _______ ________ [two word answer]

Answer 4

ANSWER: common mistake

Question 5

True or False?
Most contracts to which an infant is a party are void.

Answer 5

Answer:False

Question 6

# **Fill in the Blanks
Voidable contracts cannot be enforced _ \_ _ \_ _ the infant but can always be enforced _ \_ _ \_ the infant.**

Answer 6

Answer: Voidable contracts cannot be enforced against the infant but can always be enforced by the infant.

Question 7

True or False?
Even where the adult does not know the other party is an infant, the contract is voidable.

Answer 7

Answer:
True

Question 8

What two things must an incapacitated person prove in order to rescind a contract?

Answer 8

• *Answer:
  (1) he or she was incapable of a rational decision at the time the contract was made;
  (2) second, that the other party was aware of the incapacity at that time.**

Question 9

A claim of _ _ _ _ _ _ _ _ means that the signature on the contract was signed by mistake, without knowledge of its meaning, but was not done so negligently. A successful plea would make the contract void

Answer 9

Answer:
non est factum

Question 10

List the 7 essential elements to a valid contract

Answer 10

offer;
acceptance;
consideration;
legal intention;
capacity;
legal object;
genuine consent.

Question 11

True or False?
An expert’s opinion is treated by the courts as a statement of fact.

Answer 11

Answer: True

Question 12

What is innocent misrepresentation?

Answer 12

Answer:
Innocent misrepresentation occurs when the false statement is made without knowing it is false.

Question 13

List the three equitable remedies for breach of contract?

Answer 13

ANSWER: specific performance, injunction, and quantum meruit.

Question 14

What is fraudulent misrepresentation?

Answer 14

Answer:
Fraudulent misrepresentation occurs when the person making the false statement knows it is false, or says it recklessly and does not care whether it is true or false.

Question 15

What recourse does the plaintiff have in the case of innocent misrepresentation?​

Answer 15

• *Answer:
  (1) plaintiff can sue for rescission (the court will cancel the contract) prior to execution of the contract. With respect to a transfer of land, this means that rescission of the contract will not be available after the completion of the sale;
  (2) the plaintiff cannot sue for damages.**

Question 16

What recourse does the plaintiff have in the case of fraudulent misrepresentation?

Answer 16

• *(1) the plaintiff can sue for rescission at anytime;
  (2) the plaintiff can sue for damages (based on tort law).**

Question 17

Latent defects are . . .

Answer 17

• *Latent defects are facts which:
  (1) are unknown to the purchaser and are so crucial to the enjoyment of the property that the purchaser might not have entered into the contract had he or she known that they existed; and
  (2) cannot be discovered upon reasonable inspection of the property.**

Question 18

Asbestos insulation is an example of a _________ defect.

Answer 18

Answer: Latent defect

Question 19

True or False:
If the vendor does not disclose the existence of a latent defect, the purchaser can rescind the contract and/or recover damages

Answer 19

Answer:
True

Question 20

What are patent defects?

Answer 20

Facts that are visible to the eye.
Purchaser should have discovered by a reasonably careful inspection of the property.

Question 21

List the three types of mistakes?

Answer 21

• *Answer:
  (1) common mistake;
  (2) mutual mistake; and
  (3) unilateral mistake.**

Question 22

TRUE OR FALSE? In order to establish a misrepresentation the contract must be in writing.

Answer 22

ANSWER: FALSE

Question 23

A claim of ___ ____ _______ [three word answer] means that the signature on the contract was signed by mistake, without knowledge of its meaning, but was not done so negligently.

Answer 23

ANSWER: non est factum

Question 24

TRUE OR FALSE? The offeror cannot stipulate silence to constitute consent under any circumstances.

Answer 24

ANSWER: TRUE

Question 25

**TRUE OR FALSE? The legal significance of a counteroffer is that it completely voids the original offer.**

Answer 25

**ANSWER: TRUE**

Question 26

**TRUE OR FALSE? Foreigners and illiterates will be bound to a contract if they signed a contract but did not bother to find out the contents of what they were signing.**

Answer 26

**ANSWER: TRUE**

Question 27

**TRUE OR FALSE? Duress involves actual or threatened violence or imprisonment.**

Answer 27

**ANSWER: TRUE**

Question 28

**\_\_\_\_\_\_\_\_\_\_\_\_ is the only common law remedy available for breach of contract. The other three remedies are ____________ remedies.**

Answer 28

**Damages is the only common law remedy available for breach of contract. The other three remedies are equitable remedies.**

Question 29

**\_\_\_\_\_\_\_\_\_ _________ [two word answer] means that the court will order the terms of the contract to be carried out instead of awarding damages.**

Answer 29

**ANSWER: Specific performance**

Question 30

**TRUE OR FALSE: Specific performance will not be exercised when damages are considered to be an adequate remedy.**

Answer 30

**ANSWER: TRUE**

Question 31

**Give two things an injunction can do:**

Answer 31

**ANSWER: [1] Can stop a party from doing something (e.g., selling property to someone else when the vendor has contracted to sell it to the plaintiff); or [2] it can require a party to do something. In this case it is called a mandatory injunction.**

Question 32

**Define QUANTUM MERUIT**

Answer 32

**ANSWER: a reasonable sum of money to be paid for services rendered or work done when the amount due is not stipulated in a legally enforceable contract.**

Question 33

**\_\_\_\_\_\_\_ ________ [two word answer] exist where both parties to the contract make the same mistake.**

Answer 33

**ANSWER: Common mistakes**

Question 34

**The existence of a common mistake means the contract is _________ .**

Answer 34

**ANSWER: void**

Question 35

**A ________ \_\_\_\_\_\_\_\_\_ [two word answer] occurs when both parties make a fundamental mistake about the contract but each makes a different mistake**

Answer 35

**ANSWER: mutual mistake**

Question 36

**A mutual mistake occurs when the parties to a contract are both mistaken about the same material fact within their contract. They are at cross-purposes. There is a meeting of the minds, but the parties are mistaken. Hence the contract is \_\_\_\_\_\_\_\_\_\_\_\_.**

Answer 36

**ANSWER: Voidable**

Question 37

**This is the inability to complete a contract because the object of it has been lost or fundamentally changed.**

Answer 37

**ANSWER: Frustration**

Question 38

**TRUE OR FALSE? A contract for necessities, entered into by a minor, is not voidable but will bind the minor.**

Answer 38

**ANSWER: TRUE**

Question 39

**The principal of ___________ applies to patent defects.**

Answer 39

**Answer: Caveat Emptor . . . means "let the buyer beware"**

Question 40

**TRUE OR FALSE? The buyer is required to disclose latent defects to the seller.**

Answer 40

**ANSWER: FALSE The seller is required to disclose latent defects.**

Question 41

**The requirements of a contract are: offer, acceptance and consideration only**

Answer 41

**ANSWER: FALSE A contract has SEVEN essentials. They are: offer, acceptance, consideration, legal intention, capacity, legal object, genuine consent**