MindTap: Worksheet 13.1: Voluntary Consent

Contract law allows a contract to be _______ on the basis of mistake. Only a mistake of _____ makes a contract voidable. The mistake must involve some _____ fact.

avoided; fact; material

Match the left-hand words to their appropriate definitions on the right-hand side.

Unilateral Mistake: A mistake made by only one of the parties. The mistaken party is bound by the contract, unless the other party knows or should've known of the mistake, or the mistake is an inadvertent mathematical error in addition, subtraction, or the like that is committed without gross negligence

Bilateral Mistake: A mistake made by both parties. If both parties are mistaken about a material fact, such as the identity of the subject matter, either party can avoid the contract. If the mistake relates to the value or quality of the subject matter, either party can enforce the contract

Alicia offers to sell a purebred cat for $200. Neither Alicia nor the buyer discusses the cat's ancestry, but the buyer believes that it comes from a championship line and agrees to the price. Upon discovering that the cat is only worth $50, can the buyer rescind the contract based on her mistake?

Probably not, because the buyer made a mistake about the cat's value, not a mistake about a material fact.

When an innocent party is fraudulently induced to enter into a contract, the contract normally can be avoided because that party has not voluntarily consented to its terms.

True

When a party is fraudulently induced into a contract, that party can

rescind the contract

Which of the following is NOT an element of fraud?

intent to improve one's bargaining position

Misrepresentation by conduct involves:

a seller preventing a buyer from learning of some fact that is material.

When a naïve purchaser relies on the opinion of an expert, the innocent party may be entitled to

rescission or reformation

Misrepresentation of law ordinarily does not entitle a party to relief from a contract.

True

Ordinarily, any party to a contract has a duty to come forward and disclose facts that the other party does not know about.

False

One party's intent to deceive the other party to a contract is known as:

scienter.