Understanding Business and Personal Law

Chapter 6: Genuine Agreements

Genuine Agreement

1.
Fraud can be defined as
A)sales puffery.
B)the ability to collect punitive damages.
C)a deliberate deception intended to secure an unfair gain.
D)when consideration is missing from an agreement.
2.
When an individual chooses not to reveal information, it is called
A)passive fraud.
B)concealment.
C)all of the above.
D)nondisclosure.
3.
When a person signs an agreement, he or she is bound to it.
A)TRUE
B)FALSE
4.
To prove fraud, the innocent party must
A)show some monetary loss.
B)prove that a genuine agreement had occurred.
C)have a written contract.
D)have both consideration and capacity.
5.
A unilateral mistake is
A)an expectation that the contract will be rescinded.
B)an error on the part of one of the parties of the contract.
C)an excuse to avoid a contract.
D)one way to avoid fulfilling a contract.
6.
When a bilateral mistake occurs, neither party may avoid the contract.
A)TRUE
B)FALSE
7.
Threats to a person's business or income causing a contract to be entered into without real consent is called
A)emotional duress.
B)physical duress.
C)defective duress.
D)economic duress.
8.
An example of undue influence is the requirement of a merchant to pay a fee for protection.
A)TRUE
B)FALSE
9.
To be held accountable for fraud, the party making the false representation must know it is false.
A)TRUE
B)FALSE
10.
The law does not give you the right to rescind a contract even when innocent misrepresentation occurs.
A)TRUE
B)FALSE
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