Chapter 7 Self-test questions

Contracts, contractual capacity, mistake, misrepresentation, and duress
If the contract is for necessaries (as defined under the Sale of Goods Act 1979 s. 3) the contract will bind a minor (person under the age of majority).

Tony enters into a contract with Christopher to kill a rival mafia boss, Johnny. When Christopher decides not to complete his obligations under the contract, Tony wishes to enforce the contract through the courts. How will the court hold?

A _____ is a person under 18 years of age and who has the capacity to establish most contracts.

It is possible that in the negotiations for a contract, both parties are at cross purposes as to the nature of the contract or its subject matter. This is an example of mutual mistake.

When a contract has been agreed on the basis of a fraudulent misrepresentation, which of the following remedies are available?

Persons who are drunk or under the influence of drugs are generally _____ by the contract as it is presumed by the courts that he/she is aware of his/her actions.

Unilateral mistake is where one party is mistaken as to the concept of an agreement which is later presented as a legally binding contract or where the/she is so intoxicated that they are unaware of the identity of the other party.

In the case of misrepresentation, which of the following would NOT be actionable?

For a mistake to enable the contract to be made void, it must be __________ which prevents the establishment of the consensus ad idem required of a contract.

A person mistakenly signed a contract, believing it was to assign his house to his niece, when in reality the house was being assigned to the niece's partner. The partner obtained a mortgage on the property but did not maintain the repayments, resulting in the mortgage company attempting to repossess the house. Given these circumstances, the family of the now deceased person will be successful in avoiding the contract due to mistake.

How is economic duress evidenced in the agreement to a contract:
i) Evidence of a bad bargain.
ii) Illegitimate pressure.
iii) A false statement that has induced the other party into the contract.
iv) There was no other option for the claimant than to accept the contract.

______ mistake relates to where the parties have made the same mistake.

If a person is asked a question during the course of negotiations, and an answer is offered (although there may be no legal duty to answer questions), there is an obligation that the answer is truthful, full and complete, which does not mislead the other party.

To identify a misrepresentation there must be:
i) A statement of material fact (not opinion) that induces the other party into the contract;
ii) A representation that was false;
iii) The innocent party believed the statement to be true; and
iv) The representation induced the party into the contract.

Perhaps the most common form of mistake is _________ mistake which occurs where one party is mistaken as to the terms of the contract or the identity of the other party.

A definition of fraudulent misrepresentation is where a false statement is made, but in the honest, albeit mistaken belief that it was true.

Jack wanted a fellow director to purchase his shares at a very favourable price. Therefore, Jack held a meeting with the director, placed a loaded gun to his head, and told him he would shoot the director if he did not sign a contract for the purchase of Jack's shares. This is an example of?

If the courts believe that a written agreement did not reflect the true intentions of the parties at the time of the agreement, they may have the relevant terms changed through the equitable remedy of ____________.

Peter agrees a sale for his car with Alex for the sum of £1000 (even though the car is only worth approximately £500). However, when the contract was formed Alex was clearly under the influence of alcohol and he had trouble standing and forming a coherent sentence. When Peter attempts to enforce the contract Alex wishes to avoid it. What is the effect of this situation?

A breach of a _____________ will not enable a breach of contract claim, but may amount to a misrepresentation that makes the contract voidable.

Which one of the following is NOT an accurate statement about misrepresentation?

The general rule of contract is that _______ cannot amount to a misrepresentation, even if the disclosure of such information would in all probability dissuade the other party from contracting.

Which one of the following is NOT incompetent to contract owing to lack of capacity?

A false statement that has been made knowingly or recklessly is an example of a __________ misrepresentation.

Duress is distinct from undue influence due to:

Undue influence exercised in the formation of an agreement results in the subsequent contract being _________.

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