Practice Quiz

CLEP Business Law

Category - Contracts

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Joe the plumber contracts with Jane the homeowner to install new sewer lines. The agreed upon price was $4,500. Halfway through the job, Joe told Jane that he had to change the price to $6,500. Jane refused to pay the additional $2,000. Joe refused to finish the work unless Jane paid. Jane reluctantly paid. Joe finished the work. Jane sued Joe for return of the $2,000. Who will win?
  1. Jane will win based on the defense of fraud.
  2. Jane will win because the modification of the contract terms was not supported by additional consideration from Joe.
  3. Jane will lose because she agreed to the modification of the contract.
  4. Jane will win based on the defense of physical duress.
  5. Jane will win based on the defense of economic duress.
Explanation
Answer: E. Jane will win based on the defense of economic duress. Jane had to agree to the additional payment in order for Joe to complete the work. In order to show economic duress, a party must show that a contract existed between the parties, that the other party refused to perform under the contract, and that the party accepted the new terms due to duress.
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