Contract- Business Law

1. Duke decided to sell his car. The car’s muffler had a large hole
in it, and as a result, the care made a loud noise. Before showing the
car to potential buyers, Duke patched the hole with muffler tape to
quiet it. Perry bought the car after test driving it. He later
discovered the faulty muffler and sought to avoid the contract, claiming
fraud. Duke argued that he had not committed fraud because Perry had
not asked about the muffler and Duke had made no representation of fact
concerning it. Is Duke correct? Explain your response.

2. Thomas Silverman, who was elderly and partially disabled, lived
alone on a 25 acre farm. Mr. Silverman called the son of a friend,
Jonathan Smith and said “If you move in with me and take care of the
farm and me, it will be yours when I die.” Mr. Smith did as Mr.
Silverman requested and on Mr. Silverman’s death two years later, Mr.
Smith claimed the farm. Mr. Silverman died without a will and did not
re-title the farm in Mr. Smith’s name before he died. Mr. Silverman’s
next of kin who are handling his estate are contesting Mr. Smith’s claim
to the farm. Is Mr. Smith entitled to the farm? Explain your
reasoning. What additional facts might you want to know in making your

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