true/false

1. To rescind a contract based on fraud you must quickly and clearly do so after learning of the fraud, or the k may be ratified.

2. A party's failure to disclose facts can sometimes be a misrepresentation.

3. For duress, a threat must be considered improper.

4. Concealment of a fact through active conduct intended to prevent the other party from discovering the fact, is still never an assertion of fact.

5. Under modern law, good faith does not require a party to correct another person's mistake about a basic assumption that the contract was based on.

6. In order for a person to rescind a contract because of misrepresentation, the misrepresentation must have been fraudulent and intentional.

7. A contract caused by improper threats that leave a party no reasonable alternative but to enter into the contract is voidable (because of duress).

8. . If a contract is voidable, the person whose consent was not real may rescind.

9. When Buster sold his store to Brandy, Buster lied and said that the store was very profitable. Brandy knew that Buster was lying but bought the business anyway. Under these circumstances, Brandy will not have a fraud claim because:

-the false statement was not actually relied upon.

-the false statement was not a statement of a past or existing fact.

-the false statement was not material.

-the false statement was not knowingly made.

10. Eric submitted a bid to Johnson to perform work on a new house that Johnson was building. Eric was in a hurry to submit his bid and made a mathematical error that caused his bid to be substantially lower than those of the other bidding subcontractors. Johnson accepted Eric's bid and awarded him the subcontract for the work. Eric learned of the error and wants to rescind the contract. In this case:

-the contract is void because of Johnson's fraud.

-Eric cannot rescind.

-Eric will be able to rescind the contract because he made a mistake.

-Eric will be able to rescind the contract if Johnson had reason to know that Erie had made a mistake.

11. Which of the following is NOT an element of innocent misrepresentation?

-materiality.

-justifiable reliance.

-actual reliance.

-intent to deceive (scienter)...

12. Mike innocently says that his guitar was twenty years old. In fact, the guitar was thirty-five years old. John, who bought the guitar from Mike, admits that he would have bought the guitar so long as it was not more than fifty years old. However, John still wants to rescind the deal. Under these circumstances:

-John can rescind the contract under the theory of mutual mistake.

-John can rescind the contract under the theory of fraudulent misrepresentation.

-John cannot rescind the contract because the misrepresentation was not material.

-John can rescind the contract because of unilateral mistake of fact.