Use This Fact Situation to Answer the Related Questions That

question 66

Multiple Choice

Use this fact situation to answer the related questions that follow it. John lives with his wife,Mary,and regularly beats her,leaving Mary in a constant state of fear when John is around.John needs to borrow some money for his business,and so he goes to his bank and meets with the manager,who agrees to loan him the money,but only if both John and his wife sign a guarantee of the loan.John signs the guarantee in front of the manager and then takes it home to be signed by Mary.At home,John tells Mary to sign the guarantee "or else you know what will happen to you," so Mary signs the guarantee.
Mary's signing the guarantee under these circumstances is a classic example of

• A)assault.
• B)fraud.
• C)duress.
• D)undue influence.
• E)diminished capacity.

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Definitions:

Trade

The act of buying, selling, or exchanging goods and services between people or countries.

Market Failure

Situation in which an unregulated competitive market is inefficient because prices fail to provide proper signals to consumers and producers.

Incomplete Information

A situation in economics where all parties in a transaction do not have full and equal knowledge.

Externalities

Economic side effects or by-products that affect an uninvolved third party; can be positive or negative, such as pollution or public parks.