SOLVED

71) Which of the following theories involve scienter? A) Fraudulent misrepresentation, intentional misrepresentation. B) Mutual mistake only. C) Fraudulent misrepresentation only. D) Innocent misrepresentation, mutual mistake. E) Innocent misrepresentation, fraudulent misrepresentation. 72) Courts find negligent misrepresentation only when the party making the false statement ________. A) should have known the truth using the skills and competence required of a person in his position or profession. B) should have known the truth. C) should have known the truth using the skills and competence required of regular person. D) verified the truth and negligently continued with the false statement. E) should have known he or she was committing negligent. 73) Is the impact of negligent misrepresentation the same as that for fraudulent misrepresentation? A) Yes, they are identical. The contract can be rescinded. B) No, in fraudulent misrepresentation, the contract is void. In a case of negligent misrepresentation, the contract can be rescinded. C) No, in negligent misrepresentation, the contract is void. In a case of fraudulent misrepresentation, the contract can be rescinded. D) Yes, they are identical. The contract can be rescinded, but the mislead party cannot sue for damages. E) Yes, they are identical. The contract is void as a matter of law. [Everlasting roses] Wanda’s gardener claims that if she will pay him to apply a special treatment to her roses each week, the roses would never die. Wanda pays the gardener $25 each week for the special treatment. After a year, her favorite rosebush dies. 74) Does Wanda have a valid claim for fraudulent misrepresentation? A) Yes, because she relied on the false statement and the gardener intended to deceive her. B) Yes, but only if she relied on the false statement. C) No, because Wanda knew or should have known by the extravagance of the claim that the statement about the roses never dying was false. D) No, unless she can prove the gardener intended to deceive her. E) Yes, but only if the false statement is material to the contract. [Elton’s Electronics] Elton’s Electronics sells electronic housewares. Elton is looking for a new supplier to produce the standard-sized switchplate for its best-selling blender. He contacts Porter and provides Porter with specifications for where the switches on the switchplate should be placed. Porter provides excellent pricing and delivery terms, which would save Elton a lot of money. Elton and Porter sign a contract for Porter to produce 10,000 standard-sized switchplates according to Elton’s specifications. When the completed switchplates arrive, Elton’s employees attach them on the face of the blender, however, the standard-sized switchplates are two millimeters too long. Elton is furious and calls Porter, who says Elton can send back the switchplates and Porter’s company can re-work them, but there will be a fee because the switchplates he shipped were “standard-size” switchplates, as specified in the contract. Elton disagrees and hangs up the phone. Elton’s technician measures both the switchplates and the blender and discovers that the blender face where the switchplate is attached is two millimeters shorter than the well-known, “standard-size” switchplate. The technician suggests they could shave off two millimeters from Porter’s boards to make them fit on the blenders, however, it would be a lot of work. 75) Which of the following best describes Elton’s situation? A) Mutual mistake, because both parties were mistaken about the standard-size switchplates to be delivered under the contract. B) Duress, because Porter knows much more about the standard size for switchplates in the industry than Elton. C) Fraudulent misrepresentation, because Elton justifiably relied on a false statement by Porter. D) Unilateral mistake, because Elton was mistaken about the size of the switchplates he needed for his blenders. E) Negligent misrepresentation, because Porter should have known that the standard-size may not work for everyone. Â Â