GOVT 404 Quiz Contract Defenses
GOVT 404 Quiz Contract Defenses Assent-Based Defenses
- Richard owns a 30-acre parcel of real property valued at $200,000. Richard suffers from a mental health condition that sometimes impairs his volitional capacity but not his cognitive capacity. On one occasion, when suffering an episode of this sort, he sells the property to Watson for $125,000. Prior to closing, Richard seeks to avoid his contractual obligation to sell the property to Watson. Which of the following facts would Watson be most likely to assert in his argument that the contract is not voidable?
- Ellis is a salesperson for a farm equipment dealer. He’s worked for the employer Plow-Share LLC for three years and has been very successful. His manager, Davis, tells Ellis that he’d like to give him a promotion to regional sales manager and include a 10% raise as part of the deal. Ellis has been thinking about going to work for another farm equipment dealer, Green Tractor Innovations (GTI), and he has had some preliminary discussions with GTI about taking a job with them. During the negotiations with Plow-Share, Ellis tells Davis, “I’ll sign a one-year agreement with Plow-Share LLC if you’ll give me a 30% raise and a company car. If not, I’m going to work for GTI, and I think you’ll regret letting me get away to a competitor.” If Ellis’s comments convince Davis to agree to a 30% raise, does Davis have a likely basis for avoiding the contract?
- Lawrence contracts with Arnold to sell Lawrence’s classic automobile to Arnold for $40,000. Arnold pays a $10,000 down payment, and agrees to pay the $30,000 balance at the time he take possession of the car. However, Arnold learns, after paying the down payment to Lawrence, that the Lawrence falsely represented that he owned the car, when, in fact, Lawrence does not own the car. Assume Arnold is only interested in getting his $10,000 and having no further dealings with Lawrence or the car he offered to sell Arnold. Explain what you think the best argument is for Arnold, and be sure to include the legal theories and rules that justify your position.
- Bobbie is 17 years old. He looks considerably older than his age; in fact, most people would guess that Bobbie is about 25. Bobbie also has a maturity that is unusual for someone his age. Further, he has been running a small but successful Internet branding and advertising business from his bedroom for the past two years, so he has also developed more business sense than most of his peers. Bobbie approaches a small-business owner, Ian, who has owned restaurants for 25 years, about providing Internet marketing services for Ian’s three restaurants for the next 12 months. After contracting with Bobbie, Ian learns Bobbie’s age. Ian feels embarrassed that he’s just contracted for an important business matter with a teenager. Choose the best answer:
- The case of Wood v. Boynton involved the sale of a stone for a small sum. The stone turned out to be a diamond. The seller raised the defense of ________________, and this defense ____________, because the seller knew that there was uncertainty about the quality of the stone.
- Which of the following is not a required element of the defense of unilateral mistake?
- Del offers to sell his 100-acre parcel to Jim for $1,000,000. Jim thinks the price is high, but speculates that a new housing complex might be developed on the parcel adjacent to Del’s parcel. If that happens, Del’s parcel will be sought after for development purposes. Jim, predicting that the adjacent parcel will be developed, decides to buy Del’s parcel for $1,000,000 despite the high price. After signing the contract, Jim learns that there are no plans by any developers to develop the adjacent parcel in the foreseeable future. Jim wants to avoid his contractual obligation to buy the parcel using the doctrine of unilateral mistake. Will the circumstances constitute a mistake?
- In order for a fraudulent assertion to induce a party to agree to the terms of a contract, the assertion must
- Bobbie is 17 years old. He looks considerably older than his age; in fact, most people would guess that Bobbie is about 25. Bobbie also has a maturity that is unusual for someone his age. Further, he has been running a small but successful Internet branding and advertising business from his bedroom for the past two years, so he has also developed more business sense than most of his peers. Bobbie approaches a small-business owner, Ian, who has owned restaurants for 25 years, about providing Internet marketing services for Ian’s three restaurants for the next 12 months. After contracting with Bobbie, Ian learns Bobbie’s age. Ian feels embarrassed that he’s just contracted for an important business matter with a teenager. Choose the best answer:
- Which answer most completely describes the defenses that are available to a contracting party when the basis for the defense is action taken by a third party rather than action taken by the other party to the contract?
- If a defendant raises and proves an affirmative defense, what is the consequence?
- Which of the following is not a name sometimes used to refer to the legal concept of unjust enrichment?
- Which of the following would not constitute an improper threat for duress?
- When a contract is voidable but the party entitled to raise a defense chooses not to raise the defense and instead performs the contract, the party who elects not to raise the defense is said to have _______________ the contract.
- Dominic is the owner of a car dealership. He attends a party in honor of the 50th
wedding anniversary of a local businessperson and his spouse—an event attended by several other local businesspeople. Dominic, who does not drink alcohol, is offered a beverage called a “Long Island iced tea.” Dominic accepts the beverage, thinking it is simply iced tea, and not realizing that it is actually a mixed alcoholic drink. During the course of the evening he consumes several of the beverages and becomes intoxicated. While intoxicated, he speaks with Lindsey, who has been looking at a sports car at Dominic’s dealership. Dominic agrees to sell the car to Lindsey for a price that is one half of the car’s market value. The next day, Dominic seeks to avoid the transaction. Choose the best answer: - True or False: A party may be able to successfully raise more than one defense.
- True or False: If a contractual defense makes a contract voidable, the party who can claim the defense has a right to elect to raise the defense or to waive it.
- The difference between assertions that are fraudulent and assertions that are material is that:
- Hudson lives in his three-bedroom home for eight years and then decides to sell it. During the time he has lived in the home he has never had any trouble with the roof and has never known it to leak. He sells the house himself, placing a “for sale” sign in the yard and offering the home for sale online. One prospective buyer, Danielle, walks through the house with Hudson and asks him some questions, including the question “Does the roof leak?” Hudson answers, “No, the roof does not leak, not even a little bit.” Satised with Hudson’s answer, Danielle agrees to purchase the house from Hudson at his asking price. Prior to the closing, she learns that the roof does leak, but that the leaking is visible only from inside the attic during a heavy rainfall. Can Danielle use the doctrine of misrepresentation to avoid the contract?
- André agrees to excavate a basement on Lex’s new residential construction project. André agrees to do the work for a low price, based on his belief that the soil at the excavation site is mostly sand. He brings his excavation equipment to the job site and begins to dig into the soil to create a basement. However, instead of the soil being primarily soft sand (which is easy to excavate), the soil turns out to be primarily rock (which is time-consuming and expensive to excavate). Which fact, if added to this hypothetical, would most likely ensure that André bears the risk of his mistake?
- Mindy is selling her storage business. She has owned the business for 18 years. In the last three years the business became unprofitable. The losses incurred by the business are reflected in its quarterly financial records and other records. The worst loss the business incurred was in the most recent business quarter. Mindy places all of the financial records in a le folder marked “financial reports” and presents them together with six other folders marked “employees,” “vendors,” “storage contracts,” “collections,” “state and local,” and “miscellaneous,” respectively. The largest folder is the “miscellaneous” folder, containing about 150 pages of documents. Mindy slips the most recent quarterly financial record into the middle of the documents contained in the “miscellaneous” folder before making all of the folders available to a prospective buyer. If the buyer claims Mindy did not disclose the most recent losses in the sale of the storage business, what is the buyer’s most likely description of Mindy’s misrepresentation?
- What answer below best summarizes all the elements that must be established for a party to successfully assert the defense of duress?