Bob is tired of working as an attorney and decides to open a pet shop. Although Bob knows nothing about dogs, he decides to specialize in retrievers. Bob calls up Dog Breeder and orders 10 Black Labrador retrievers, 10 Chocolate Labrador retrievers, and 10 Yellow Labrador retrievers. All dogs are to be pure bred and male.

Breeder mistakenly sends Bob 5 male and 5 female retrievers of each category. Bob does not notice the difference. Although Breeder “certifies” that they are pure bred, he does not send any papers.

Bob puts an ad in the newspaper advertising male Black Labs $200.00 each, male Yellow Labs $150.00 each, male Chocolate Labs $100.00 each. Grand Opening Sale.

The ad works and Bob’s store is busy. Sally is the first person in …show more content…

There is no assumption here since Sally reasonably relied on Bob's expertise (or at least what she reasonably perceived as his expertise).

With regard to the facts between Betty and Bob, select the probable result:
b) Voidable based on Bob’s Misrepresentation
A non-fraudulent misrepresentation (i.e., Bob did not know that he had misrepresented the dog) still makes the contract voidable if the other party justifiably relied on the misrepresentation and the misrepresentation was material. The representation is material if the information asserted would induce a reasonable person to agree, or the seller knew that the information asserted would induce a sale.

Here, Bob asserted that the dog was pure bred, and he knew that would induce a sale. Even though Bob's misinformation was unintentional, it was still a misrepresentation. He knew that Betty relied on his statements and pure bred dogs are more valuable (thus, it was material).

With regard to the facts between Sarah and Bob, select the probable result:
b) Unilateral mistake, Valid Contract
Sarah made mistake based upon her own incorrect assumptions. Bob did not misrepresent anything to Sarah. The contract is valid and enforceable.

The legal rule is that where only one of the parties is mistaken about facts relating to the agreement, the mistake will not prevent formation of a contract. However, if the non-mistaken party knew or had reason to know of the mistake made by the other party, then the contract could be