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Exam 12: Defenses to Contract Enforceability

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Question 1

Multiple Choice

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Mark fails to reveal a material fact in a business deal with Nancy. This constitutes fraud

A) if Mark is unaware of the fact and the failure.
B) if the amount of consideration received is grossly inadequate.
C) if the fact concerns a serious defect known to Mark and unlikely to be known by Nancy.
D) under any circumstances.

E) B) and D)
F) A) and B)

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Question 2

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A contract must be in writing to be enforceable if the contract makes performance possible within any definite period of time.

A) True
B) False

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Question 3

True/False

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A fact is objective and verifiable.

Julie orally agrees to assume Carlyle's debt to FunGames, Inc. Julie gets a substantial personal benefit from the agreement-Carlyle agrees to work for Julie's landscaping service for six months. Julie's oral assumption of the debt is enforceable by

An oral contract for a sale of goods for more than $5,000 is not enforceable even if the parties to it admit to its existence in court.

Multi Investments, Inc., offers to buy Nano Toy Corporation. On May 1, Nano provides copies of its financial statements for the previous year, showing an inventory of $10 million. On May 15, Nano discovers that the previous year's inventory is overstated by $5 million, but does not inform Multi. On June 1, Multi, relying on the financial statements, buys Nano. On June 10, the buyer discovers the inventory overstatement. Can Multi succeed in a suit against Nano for fraud?

A prenuptial agreement must be in writing to be enforceable.

Under the Statute of Frauds, fixtures, such as buildings, growing crops and minerals, are treated as real property.

Marta buys a candy bar for $5 and signs a contract for delivery of fresh flowers to her mother's nursing home every week for the rest of her mother's life. She then enters into a contract to assume George's debt to FastCars Dealership. Marta receives no personal benefit from assuming George's debt. The Statute of Frauds covers

Dixie May enters into a contract to buy one hundred pounds of pecans from Margaret. The contract must be in writing if the pecans cost

Beau sells a car to Cody without disclosing that the odometer, which reads 40,000 miles, was disconnected 80,000 miles ago. Beau is liable for

Andy knows nothing about horses. Peter, an expert horse trainer, knows that a certain horse has no talent and is not likely to win any competitions. Peter convinces Andy to buy the horse for $500,000 by assuring him that it has great talent. The horse turns out to have no talent and never wins any competitions. Andy can most likely recover damages based on

A contract is sometimes voidable if one party is aware that the other party made a mistake of fact.

Fiona and Dora enter into an oral contract under which Fiona agrees to work on Dora's farm for not less than one week. This contract is enforceable by

Wilma, who lives in New York, enters into a contract to buy a painting from Fred, who lives in France. The contract includes all the costs of insuring and shipping the painting from France to New York. The agent that made the shipping estimate makes a mistake when adding up the costs and, as a result, the shipping cost listed in the contract is $1,000 less than the shipping actually costs. A court will most likely

Ilsa and Jiffy Loan Company enter into an oral contract under which Ilsa agrees to pay Kyle's debt if he does not. Ilsa does not get any personal benefit from the agreement. This contract is enforceable by

Prenuptial agreements are agreements made during a wedding ceremony that define each partner's duties to one another during the marriage.

In some states, an otherwise unenforceable oral contract may be enforced under the doctrine of promissory estoppel.

Ted and Svetlana orally agree to several different oral contracts. The Statute of Frauds will bar enforcement of an oral contract for

Barb, a real estate agent, is showing John a house. She tells him that this is a house where "his family can live happily ever after." John buys the house, but his wife does not like it. John