COB 218 Chapter 11 Study Questions with Correct Answers

COB 218 Chapter 11 Study Questions with Correct Answers Major obstacles to genuine assent - Answer-- Mistake - Misrepresentation - Undue Influence - Duress Mistake - Answer-An erroneous belief about the facts of a contract at the time the contract is concluded. When a mistake occurs, legal assent is absent. Mistakes in contract law do NOT result from the untrue statements of the other party to the contract Unilateral Mistake - Answer--The result of error by ONE party about a material fact - In general does NOT void a contract. Sometimes however, rescission is permitted (can be costly in time and lost opportunities) Mutual Mistake - Answer--The result of an error by both parties about a material fact - Either party can choose to rescind the contract. Rescinding is fair because any agreement between the parties was an illusion. material fact - Answer-a fact that is important in the context of the particular contract. Conditions that would permit a court to invalidate a contract on the grounds of unilateral mistake - Answer-1. One party made a mistake about a material fact and the other party either knew or had reason to know about the mistake 2. The mistake was caused by a clerical error that did not result from gross negligence. 3. The mistake was so serious that the contract is unconscionable that is, so unreasonable that it is outrageous.