Singapore American School ECON 102 Quiz for Lecture 4 1)Two sons inherit their family home when their elderly mother dies

Singapore American School

ECON 102

Quiz for Lecture 4

1)Two sons inherit their family home when their elderly mother dies. One son was told that the mother died in hospital but she in fact died in the house. The purchasers were adamant that they would not purchase the home is she had die in it, so asked the son. He said she had died in hospital and that he had an ambulance receipt he could show them. The real estate agent was asked and although she was aware a neighbor had found the mother and then called an ambulance, said the woman had died in hospital, so the purchasers went ahead and bought the home based on her advice. They have now found out the truth from the neighbor. Which is the best answer?

1. 1. The purchaser can sue the agent for negligent misrepresentation
   2. The purchaser can sue the son for negligent misrepresentation
   3. The purchaser cannot sue the son as she was not induced to enter into the contract by him
   4. If there is an misrepresentation by the son, the facts would allow the purchaser to sue for either rescission or damages
2. The best answer regarding insurance is:

1. 1. An insurance policy is voidable by the insurer where the insured has failed to disclose relevant facts within their knowledge in their applicable for the insurance
   2. Where an accident is caused by the negligence of a third party, the insurance company through subrogation may recover any funds they have paid to their insured
   3. The duty of utmost good faith requires an insured to not engage in criminal or tortuous acts, other than negligence, and then enforce a claim for coverage
   4. Claims for business interruption include wrongs committed by the business against a third party

3. What best describes misrepresentation?

1. 1. An opinion cannot be a misrepresentation because it is not a statement of fact
   2. You do not need to disclose latent defects in real estate
   3. Parties can use an entire agreement clause to protect only against innocent and negligent misrepresentation
   4. Rescission is not possible for innocent misrepresentation

4. What best describes the law of interpretation?

1. 1. the courts will not imply a term into a contract if the parties have left it out

1. 2. the courts will imply terms into a contract

1. 3. express terms will be decided based only on the surrounding contextual circumstances

1. 4. contra proferentum means that the insurance companies always lose