Asked by Savannah Young Kelsey on Jul 22, 2024
Verified
Cheap Motorcycle.Tony,a hateful,disgruntled business law professor,notices that Peter,a student who is past the age of majority,has bought a new motorcycle.Peter has struggled through school,is in his last semester,and needs to pass business law in order to graduate.Tony tells Peter that he would like to see Peter pass,and in the next sentence,Tony says that he wants to buy the motorcycle for $100,a price far below the value of the motorcycle.Peter asks if Tony is serious about the price,and Tony replies,"I have the power here!" Tony proceeds to draw up a contract for the sale of the motorcycle for $100 with lots of fine print by which he can sue Peter and recover any maintenance costs for the next five years.Seeing that he is at an advantage,Tony also throws into the deal that Peter will mow Tony's one-acre yard for $5 all summer long.After Tony tells Peter to either take the contract or leave it,Tony reluctantly signs.Which of the following is true if Peter seeks to rescind the contractual agreement to sell the motorcycle?
A) Peter may rescind the agreement based on fraud.
B) Peter may rescind the agreement based on unconscionability.
C) Peter may rescind the agreement based on mistake.
D) Peter may rescind the agreement based on fraud,unconscionability,and mistake.
E) Peter may rescind the agreement based on fraud or unconscionability,but not mistake.
Unconscionability
A condition in which a contract or a clause within the contract is deemed unjust or extremely one-sided in favor of the party with more power.
Fraud
Deceptive action intended to result in financial or personal gain or to cause harm to another party.
Mistake
An erroneous belief, at the time a contract is concluded, about certain facts or laws that may affect the contract's validity.
- Ascertain the legality and enforceability of agreements depending on the specific situations and entities engaged.
- Understand the implications of fraudulent activities and misrepresentations in contract formation.
Verified Answer
PF
Parker FitnessJul 27, 2024
Final Answer :
B
Explanation :
There are times when agreements are so one-sided,or heavy-handed against one party,that the courts will not make the harmed,innocent person fulfill his or her contractual duties.These heavily one-sided agreements are known as unconscionable agreements.The term unconscionable refers to the fact that the agreement in question is so unfair that it is void of conscience.
Learning Objectives
- Ascertain the legality and enforceability of agreements depending on the specific situations and entities engaged.
- Understand the implications of fraudulent activities and misrepresentations in contract formation.