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Question 1. 1. To rescind a contract is to cancel it. True False Question 2. 2. Alan owns two motorcycles, worth $1,000 and $500, respectively. Alan and Britney enter into a contract for the sale of "Alan's motorcycle" for $750. Alan believes, in good faith, that he is selling the $500 motorcycle. Britney believes, also in good faith, that she is buying the $1,000 motorcy¬cle. Due to their mistake: Alan is entitled to receive $750 for the motorcycle worth $500. Britney is entitled to buy the $1,000 motorcycle for $750. Britney is entitled to select either motorcycle for $750. there is no contract. Question 3. 3. The rights of a third party bene¬ficiary under a contract are subject to any express reservation of rights in the contract to the original parties. True False Question 4. 4. Under the Statute of Frauds, all contracts must be in writing to be enforceable. True False Question 5. 5. Dina, an employee of Eagle Industries, is injured in a work-related acci¬dent. Based on the diagnosis of Frank, a doctor, Dina accepts $50,000 from Eagle and waives the right to future claims. Frank's diagnosis later proves to have been wrong. According to the reasoning of the court in Case 10.1, Roberts v. Century Contractors, Inc., Frank's misdiagnosis is, in terms of its impact on Dina's agreement with Eagle: a mutual mistake of fact. a unilateral mistake of fact. fraudulent misrepresentation. nonfraudulent misrepresentation. Question 6. 6. Any contract breach discharges the nonbreaching party from the contract. True False Question 7. 7. When one party substantially performs his or her duties under the contract, the other party is required to fully perform. True False Question 8. 8. Ron makes a contract with Sue that indirectly benefits Tim, although nei¬ther Ron nor Sue intended that result. Tim is: ( a delegatee. an assignee. an incidental beneficiary. a rescinding party. Question 9. 9. When both parties are mistaken as to the same material fact, neither party can rescind the contract. True False Question 10. 10. An expert's false statement to a naive buyer about a technical detail will not usually entitle the buyer to rescind a contract. True False
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