BUL 5810 EXAM 3 QUESTIONS WITH COMPLETE SOLUTIONS
What is the general rule for communication of acceptance? - Answer-Acceptance effective upon dispatch unless the offer specifically provides otherwise or the offeree uses an unauthorized means of communication.
The communication of acceptance mu...
BUL 5810 EXAM 3 QUESTIONS WITH
COMPLETE SOLUTIONS
What is the general rule for communication of acceptance? - Answer-Acceptance
effective upon dispatch unless the offer specifically provides otherwise or the offeree
uses an unauthorized means of communication.
The communication of acceptance must conform to the
__________________________ in the offer - Answer-specification
The Restatement and the Code provide that unless the offer provides otherwise,
acceptance is authorized to be in: - Answer-any reasonable manner
Unauthorized Means acceptance is effective when received, provided that: - Answer-it
is received within the time within which the authorized means would have arrived.
T or F: The first communication received by the offeror is effective. - Answer-True
Defective Acceptance does not create a contract but serves as a: - Answer-new offer
Duress is defined as: - Answer-wrongful or unlawful act or threat that overcomes the
free will of a party.
What is physical compulsion? - Answer-Coercion involving physical force renders the
agreement void.
Improper threats or acts, including economic and social coercion, render the contract
________________. - Answer-voidable
What is undue influence? - Answer-Taking unfair advantage of a person by reason of a
dominant position based on a confidential relationship.
What is the effect of undue influence on a contract? - Answer-It renders the contract
voidable.
What is fraud in the execution? - Answer-A misrepresentation that deceives the other
party as to the nature of a document, evidencing that the contract renders the
agreement void.
Fraud in the Inducement renders the agreement voidable if the following elements are
present: - Answer-1. False Representation - positive statement or conduct that misleads
2. Fact - an event that occurred or a thing that actually exists
, 3. Materiality - misrepresentation would be likely to induce a reasonable person to
manifest her assent
4. Knowledge of Falsity and Intention to Deceive - called scienter and includes (1)
actual knowledge, (2) lack of belief in statement's truthfulness, or (3) reckless
indifference to statement's truthfulness
5. Justifiable Reliance - a defrauded party is reasonably influenced by the
misrepresentation
Misrepresentation made without knowledge of its falsity and without due care in
ascertaining its truthfulness is known as: - Answer-Negligent Misrepresentation; renders
the contract voidable.
Misrepresentation made without knowledge of its falsity but with due care is known as: -
Answer-Innocent Misrepresentation; renders the contract voidable.
An understanding that is not in accord with existing fact is a ______________. -
Answer-mistake
A mutual mistake is when: - Answer-Both parties have a common but erroneous belief
forming the basis of the contract; renders the contract voidable by either party.
In the case of a unilateral mistake: - Answer-courts are unlikely to grant relief unless the
error is known or should be known by the nonmistaken party.
T or F: A party may assume the risk of a mistake. - Answer-True
Effect of fault upon a mistake is: - Answer-not a bar to avoidance unless the fault
amounts to a failure to act in good faith.
What are the elements of consideration (the inducement to enter into a contract)? -
Answer-Legal sufficiency and bargained-for exchange.
Legal sufficiency consists of: - Answer-either a benefit to the promisor or a detriment to
the promisee.
Obtaining something to which one had no prior legal right is a: - Answer-legal benefit
Doing an act one is not legally obligated to do or not doing an act that one has a legal
right to do is a: - Answer-legal detriment
Adequacy is not required where: - Answer-the parties have freely agreed to the
exchange.
An illusory promise is: - Answer-a promise that imposes no obligation on the promisor.
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