1) Which of the following is true regarding mistakes in a contract environment?

a) A material mistake usually pertains to opinions of value.

b) An incidental mistake will immediately cause a contract to be void.

c) In the event of a mutual material mistake the contract is still generally still enforceable.

d) In the event of a unilateral mistake a contract is generally still enforceable.

2) Which of the following would be considered a misrepresentation of a material fact, and therefore subject to a finding of fraud?

a) Yogurt claiming to be 99% fat free was found to have a fat level of 1.4%.

b) You buy a new Chevrolet Corvette with a gas mileage rating of 23 MPG in the city. Your actual experience is 21 MPG.

c) A used automobile listed for sale with 75,000 miles shows 75,252 miles on the odometer.

d) You bought a diamond ring advertised as having a solitaire stone of 1.5 carats weight. You have the ring appraised and find that the stone is .60 carats.

3) While on vacation you are stricken with a severe illness requiring a hospital stay several hundred miles from home. While you are heavily sedated your spouse has you sign papers so the hospital bill can be covered. The truth is you have adequate insurance to pay the bill and the document you signed allows your spouse to sell your cabin on the lake, and your spouse uses the proceeds from the sale to buy a new Lexus GS SUV. This is an example of (choose the best answer):

a) Unconscionability

b) Innocent misrepresentation

c) Undue influence

d) Duress

4) The term capacity relates to the ability of one mind to meet another mind. How does this term apply to a minor?

a) Minors are never responsible for their actions, no matter how developed their minds are.

b) A minor may have not developed the ability to have a meeting of the mind and fully understand the requirements of a contract.

c) A minor is assumed to be looking for dishonest gain.

d) Minors cannot be released from a contract unless the other party agrees to do so.