Question

Business Law

Suppose you entered a contract to buy your friend's iPad. Without your knowledge, it was malfunctioning at the time you bought it, and—soon after you started using it—was completely useless. You are able to prove that your friend knew about the malfunction, concealed it from you on purpose, and you reasonably relied on his presentation to you regarding its proper functioning because he works for Apple designing iPad components. Thus, you are able to prevail on a claim for rescission based on fraud. What happens now?

• Your friend will pay a penalty and serve a few days in jail.

• Your friend must give your money back and you can keep the iPad.

• Your friend must give you your money back and enough additional money to buy a brand new iPad.

• You must give back the iPad and your friend must give your money back.

• Your friend must buy you a new iPad.

  Suppose you entered a contract to buy your friend's iPad. Without your knowledge, it was malfunctioning at the time you bought it, and it died soon after you started using it. Your friend had recently removed a large number of applications from the iPad that were not working. Although he honestly thought the problem was with the applications and not the iPad itself, he failed to tell you about the problem. You reasonably concluded, based on your inspection of all of the current applications on the iPad, that it was functioning properly. Can you rescind the contract to buy the iPad?

• Yes, due to fraud.

• Yes, due to innocent misrepresentation.

• Yes, due to mutual mistake.

• Yes, due to undue influence.

• No, the latent malfunction was not material, because the iPad was functioning when you bought it.

  If a contract lacks consent due to misrepresentation, fraud, mistake, duress, or undue influence, which of the following is correct?

• Punitive damages are available.

• A party to the contract can ratify it, thus losing the right to rescission.

• The contract is void.

• Only minors can lack real consent under these defenses.

• A party must prove scienter under each defense to be entitled to rescission.

  Frank is unsure about whether he wants to buy Eric’s computer. Eric grabs Frank’s hand and physically forces him to sign a written contract to purchase the computer. The contract is __________

• void

• material

• voidable

• mistaken

• affirmed

  Duress is based on pressure exerted by __________; undue influence's pressure is exerted through ____________.

• unfairness; scienter

• unfairness; scienter

• scienter; unfairness

• coercion; persuasion

• persuasion; coercion

Answer 1

1. You must give back the iPad and your friend must give your money back.

Rescission of contract means restoring back to the original state.

2. Yes ,due to mutual mistake.

Mutual mistake of a material fact in this scenario allows you to void the contract.

3. The contract is void.

The contracts are void if they are entered into due to any of the aforementioned practices.

4. Void

A contract entered into duress is void.

5. Coercion; persuasion.

Duress is done through coercion, while persuasion is done through persuasion.