Question

Study each of the following cases. Answer the questions that follow with Yes or No and support your answer.

32). Undue Influence Guss, a professor at a small college, offered to sell his five-year-old car to Kantrowitz, a student in one of his classes. The price Guss asked was well above market value. Kantrowitz accepted Guss’s offer without even test-driving the car.

a. Is the contract between Guss and Kantrowitz voidable by either Guss or Kantrowitz?

b. Is the contract between Guss and Kantrowitz voidable only by Guss?

c. Is this a contract of adhesion?

d. Is this an example of misrepresentation?

33). Intentional Concealment Gortino, while trying to sell his house to Gawlas, was asked if he had ever seen or suspected termites in the house. Gortino replied that he had not and that the house was sound. Several months after Gawlas had purchased the house, she learned from neighbors that Gortino had paid for soil treatment to eliminate termites.

a. Can the contract for sale be canceled because of fraud?

b. Was there a misstatement of a material fact?

c. Did Gawlas suffer a loss as a result of Gortino’s actions?

d. Can Gawlas sue for damages?Page 147

34). Voidable Contract Gallagher Restaurant Supply was in the business of leasing equipment to small restaurants. Quezada, the operator of a small diner, leased a coffeemaker from Gallagher. It was only after the contract had been signed that Quezada learned that similar lease agreements with other restaurants were far less costly. Also, the agreement between the parties provided for an accelerated payment of the entire balance if Quezada failed to perform any condition of the lease, “no matter how trivial the condition may be.” In addition, Gallagher would be entitled to take back the coffeemaker and collect a 20 percent penalty.

a. Is this an example of a contract signed under duress?

b. Is it likely that a court would enforce this contract?

c. Is this an example of a void contract?

d. Is this an example of a voidable contract?

Answer 1

Answering the first 4 questions as per Chegg Guidelines:

32. Undue Influence

a) No, only that party in a contract has the power of making the contract voidable which feels they are victim of undue influence and are being taken advantage of. So, the contract between Guss and Kantrowitz can be voidable only Kantrowitz as he is paying quite high for Guss’ car and had even not asked for a test drive.

b) No, the contract between Guss and Kantrowitz cannot be voided by Guss. This is so because the contract can only be voided by the weaker party in the contract which is being taken advantage of. In this case, Guss is the powerful party who has influence in the contract. He is not under any undue influence and so he cannot void the contract.

c) No, this is not a contract of adhesion. Contract of adhesion is the type of contract which has been written in favour of the stronger party involved in the contract and must be accepted as it is. No bargain can be done in the terms and conditions of the contract. In the given case, Kantrowitz himself did not ask for any bargaining in terms and conditions as Guss was his teacher. This is a case of undue influence and not contract of adhesion.

d) No, this is not an example of misrepresentation. Misrepresentation happens when there is an unintentional misrepresentation of facts of the contract. In this case, there was no misrepresentation of facts done by Guss.