What are the two types of fraud and what is the effect of each on the contract involved? Give an example of each type of fraud
Fraud in the execution is a misrepresentation that deceives the other party as to the nature of a document evidencing the contract. For example, Melody delivers a package to Ray, requests Ray to sign a receipt for it, holds out a simple printed form headed "Receipt," and indicates the line on which Ray is to sign. This line appears to Ray to be the bottom line of the form, but instead it is the bottom line of a promissory note cleverly concealed underneath the receipt. Ray signs where directed without knowing that he is signing a note. This is fraud in the execution. It renders the transaction void. Fraud in the inducement is a misrepresentation regarding the subject matter of a contract and inducement of the other party to enter into it. For example, Alice, in offering to sell her dog to Bob, tells Bob that the dog won first prize in its class in the recent national dog show. In fact, the dog had not even been entered in the show. This statement induces Bob to accept the offer and pay a high price for the dog. There is a contract, but it is voidable by Bob because Alice's fraud induced his assent.
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Emerald Corporation's overhead budget for 2013 was as follows: Factory supervision $450,000 Utilities costs 250,000 Insurance 30,000 Property taxes 25,000 Depreciation 125,000 Total $880,000 750,000 units were produced in 2013. Direct labor cost is $42,000,000. For both 2013 and 2014, each unit required 4 direct labor hours at $14 per hour. In 2014, property taxes, insurance, and depreciation are
expected to stay at 2013 levels. Utilities costs vary proportionally with units produced. Factory supervision increases by increments of $45,000 for every 300,000 increase in direct labor hours. The 2014 expected production is 1,200,000 units. What will be the value for utilities of Emerald in the 2014 overhead budget? A) $450,000 B) $250,000 C) $400,000 D) $650,000
Strikers, Inc. sells soccer goals to customers over the Internet. History has shown that 2% of Strikers' goals will need repair under the warranty program. For the year, Strikers has sold 4,000 goals and 45 have been repaired. If the estimated cost to repair a goal is $200, what would be the warranty expense for the year?
A. $0. B. $7,000. C. $9,000. D. $16,000.
When determining the date of maturity of a note, omit the date the note was issued
Indicate whether the statement is true or false
In November, the Universal Solutions Division of Keaffaber Corporation had average operating assets of $480,000 and net operating income of $46,200. The company uses residual income, with a minimum required rate of return of 11%, to evaluate the performance of its divisions. What was the Universal Solutions Division's residual income in November?
A. $6,600 B. $5,082 C. ($6,600) D. ($5,082)