Solution Manual For Essentials of Business Law 10th Edition Anthony Liuzzo Ruth Calhoun Hughes Full Download
Solution Manual For Essentials of Business Law 10th Edition Anthony Liuzzo Ruth Calhoun Hughes Full Download
Solution Manual For Essentials of Business Law 10th Edition Anthony Liuzzo Ruth Calhoun Hughes Full Download
INSTRUCTOR’S MANUAL
LESSON OVERVIEW
In Chapter 7 students were introduced to the six elements of an enforceable contract, and
Chapter 8 discussed offer and acceptance—the first of the essential elements for a
contract to be valid. In Chapter 9, students examine the potential problems with achieving
a meeting of the minds, the second of these essential elements. Genuineness of Assent, or
reality, is critical to a valid contract, and if there is any misunderstanding, force, or
deception the contract is voidable, and may be disaffirmed at the option of the injured
party. A voidable contract results if agreement of either party is obtained by fraud,
misrepresentation, mistake, undue influence, or duress, or if the contract is one of
adhesion, or is unconscionable. Each of these terms will be explained in this chapter.
Students are encouraged to conduct their own research, and use the end-of-chapter
exercises to further their understanding of these concepts.
CHAPTER OUTLINE
A. DEFECTIVE AGREEMENTS
B. FRAUD
C. MISREPRESENTATION
D. MISTAKE
E. UNDUE INFLUENCE
F. DURESS
G. CONTRACTS OF ADHESION
H. UNCONSCIONABLE CONTRACTS
I. CHAPTER SUMMARY
J. CHAPTER ASSESSMENT
1. Matching Key Terms
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© 2019 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in
whole or part.
Ch 09 – Mutual Agreement
2. True/False Quiz
3. Discussion Questions
4. Thinking Critically About the Law
5. Case Questions
6. Case Analysis
7. Legal Research
KEY TERMS
Key terms are listed at the beginning of the chapter, posted in the student textbook
margins, and placed in bold in the copy. They are listed here for your quick reference.
LEARNING OUTCOMES
The chapter Learning Outcomes will help you and the students discover the concepts and
information that should be understood upon completion of the chapter. You may want to
access the PowerPoint (PPT) slides for Chapter 9 when you begin the study of the
chapter and discuss each Learning Outcomes. Each Learning Outcome will be covered
separately in the Instructor Notes, but they are shown here in total as an overview of the
sections being presented in Chapter 9. These slides should be used to reinforce the main
1. List seven ways in which a lack of a meeting of the minds may cause defective
agreements.
2. Identify the elements of fraud.
3. Explain misrepresentation and how it differs from fraud.
4. Explain the concept of mistake in the eyes of the law.
5. Define undue influence and explain its impact upon the validity of a contract.
6. Describe duress and the forms that such may take.
7. Define contracts of adhesion and describe the conditions under which these contracts
are voidable.
8. Define unconscionable contracts.
LECTURE OUTLINE
A. DEFECTIVE AGREEMENTS
Genuineness (of Assent), or reality, of agreement is said to be present in a
contract when there is a true mutual meeting of the minds of the parties. If there is
any misunderstanding or if any force or deception is used by either party to obtain
the necessary agreement of the other party, the contract is voidable, and may be
disaffirmed at the option of the injured party. A voidable contract results if
agreement of either party is obtained by fraud, misrepresentation, mistake, undue
influence, or duress, or if the contract is one of adhesion, or is unconscionable.
1. Fraud
Fraud is the intentional misstatement or nondisclosure of a material fact
made by one party with the hope of influencing the other party. It does not
matter how the fraud is committed. It may be by spoken or written words
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© 2019 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in
whole or part.
Ch 09 – Mutual Agreement
2. Negligent Misrepresentation
Negligent Misrepresentation as opposed to fraud, is the unintentional
misstatement or nondisclosure of a material fact that results in inducing
another to enter into an agreement to his or her loss (detriment).
It is important to note the distinction between fraud and misrepresentation
because the remedy is different. An injured party who can successfully
prove fraud may have the contract canceled and bring suit for damages. If
the party can prove only negligent misrepresentation, the contract may be
canceled, but the injured party usually cannot sue for additional damages.
3. Mistake
In the eyes of the law, a mistake is a belief that is not in accord with the
facts. Mistakes relating to contracts may be concerned with the nature of
the subject matter or the quality of the subject matter. Obviously, not
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© 2019 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in
whole or part.
Ch 09 – Mutual Agreement
every erroneous idea or notion is a mistake, and the law makes it clear that
the mistaken belief must concern an existing fact and not a belief about
what might happen in the future. Court decisions involving mistakes are
often complex, and the courts attempt to determine whether the mistake
was “unilateral,” that is, made by only one party, or whether the mistake
was “mutual,” that is, made by both parties, whether it was known by the
parties or not. For a contract to be dissolved because of a mistake, the law
usually requires that both parties be a part of the misunderstanding. That
is, the mistake must be mutual and substantial as to negate the objective of
the parties to the contract.
4. Undue Influence
Sometimes a person has the power to control the actions of another
because of a special or confidential relationship to that person. Such
relationships are sometimes found between employer and employee,
physician or nurse and patient, teacher and student, attorney and client,
financial manager and client, and so on. When someone uses this power
improperly to his or her personal advantage, undue influence is said to
exist. A contract resulting from the use of undue influence is voidable at
the option of the party wrongfully influenced.
5. Duress
Duress is the act of applying unlawful or improper pressure or influence
to a person in order to gain his or her agreement to a contract. Such
pressure may take the form of a threat of bodily harm to an individual or
to his or her family, or the threat of serious loss or damage to his or her
property or reputation. When threats are used to force someone to enter
into a contract, the agreement may be dissolved by the injured party; the
contract voided.
6. Contracts of Adhesion
A contract that involves parties who have unequal bargaining power is
known as a contract of adhesion. These take-it-or-leave-it contracts are
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© 2019 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in
whole or part.
Ch 09 – Mutual Agreement
INSTRUCTOR NOTES
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© 2019 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in
whole or part.
Ch 09 – Mutual Agreement
LO5. Define undue influence and explain its impact upon the validity of a contract.
Undue influence is the improper use of power to control the actions of another
because of a special or confidential relationship to that person. A contract
resulting from the use of undue influence is voidable at the option of the party
wrongfully influenced.
LO6. Describe duress and the forms that such may take.
Duress is the act of applying unlawful or improper pressure or influence to a
person in order to gain his or her agreement to a contract. Such pressure can take
the form of a threat of bodily harm to an individual or to his or her family, or the
threat of serious loss or damage to his or her property.
LO7. Define contracts of adhesion and describe the conditions under which these
contracts are voidable.
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© 2019 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in
whole or part.
Ch 09 – Mutual Agreement
Contracts of adhesion are contracts that involve parties who have unequal
bargaining power. When enforcement of an otherwise legal contract will result in
a significant hardship to one of the parties, courts have considered such
agreements to be so unfair as to be unenforceable.
LO8. Define unconscionable contracts.
Unconscionable contracts are contracts that are regarded as shockingly unjust or
unfair.
1. i 4. g 7. j 10. h
2. b 5. c 8. e
3. a 6. d 9. f
True/False Quiz
Discussion Questions
21. For an injured party to claim fraud, he or she must prove that the statement or act
(1) was a misstatement or nondisclosure of a material fact; (2) was made with
knowledge of its falsity or with reckless disregard of its truth; (3) was made with
the intention of causing the other party to enter into the agreement; (4) was relied
on by the injured party; and (5) resulted in loss to the injured party.
22. Fraud is (a) a misstatement or nondisclosure of a material fact; (b) made with
knowledge of its falsity or with reckless disregard of its truth; (c) made with the
intention of causing the other party to enter into the agreement; (d) relied on by
the injured party; and (e) resulting in loss to the injured party. Misrepresentation
is (a) the unintentional misstatement or nondisclosure of a material fact; (b)
resulting in inducing another to enter into an agreement; and (c) loss to the injured
party.
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© 2019 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in
whole or part.
Ch 09 – Mutual Agreement
23. Unconscionable contracts are contracts that are regarded as shockingly unjust or
unfair.
24. Duress can take the form of a threat of bodily harm to an individual or to his or
her family, or the threat of serious loss or damage to his or her property.
25. Students may wish to respond by offering personal experiences. Persuasive
statements based on a salesperson’s opinion are referred to as puffing. They are
usually exaggerations of a product’s features.
26. Examples of the use of undue influence include a doctor recommending certain
medical equipment to his patient, or a financial planner urging a client to make
certain investments. A contract resulting from the use of undue influence is
voidable at the option of the party wrongfully influenced.
32. a. N b. N c. N d. N
33. a. Y b. Y c. Y d. Y
34. a. N b. N c. N d. Y
Case Analysis
35. Principle of law: The courts normally do not attempt to enforce contracts where
there is evidence of mutual mistake.
Decision: There was sufficient evidence in this case to suggest that there was a
mistake by both parties and the mistake would make enforcement of the contract
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© 2019 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or
distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in
whole or part.
Solution Manual for Essentials of Business Law, 10th Edition, Anthony Liuzzo Ruth Calhoun Hu
Ch 09 – Mutual Agreement
“materially more onerous” to the buyer than would be the case if the facts had
been as the parties had believed them to be.
36. Principle of law: Courts normally do not enforce contracts of adhesion in cases
in which there is gross disparity in the bargaining power of the parties.
Decision: The court refused to enforce the clause in question.
37. Principle of law: Making a false statement, even when done innocently, is
misrepresentation and is sufficient to invalidate an agreement.
Decision: Larson is probably not bound to the lease because of Malina’s false
statement about the load-bearing capacity of the floors, which is a material fact.
38. Principle of law: Both fraud and misrepresentation make a contract voidable.
Decision: Harley-Davidson has stated a viable cause of action for contractual
rescission.
Legal Research
39. Results of the team research will vary depending on the dry cleaning
establishments, movie theaters, or parking garages chosen.
40. The Internet should provide numerous cases involving unconscionable contracts
and existing legislation in several jurisdictions that concern such contracts.
BONUS ACTIVITIES
• Ask each student to bring in an article related to one of the seven reasons for lack
of meeting of the minds that may interfere with the legal enforcement of
agreements. Have each student write a brief analysis on their article, and discuss
• Ask students to form pairs or small groups, and role play cases of duress in class.
Have them focus primarily on the act of applying unlawful or improper pressure