Each of the given questions presents one or more legal issues. In your answers, state each legal issue succinctly, state the pertinent rule of law and explain how the rule applies. If a case from the textbook or other course materials is relevant, cite it and explain its application to the problem.
Steve wanted to buy a car, and he answered Shelly's ad for a '92 Grand Prix on March 1. The odometer read 40,000, but Shelly had turned it back. The car's true mileage was 140,000. Steve took the car for a test drive; then he and Shelly agreed on a price of $8,000, payable in thirty days. He gave Shelly a signed document that said, "IOU $8,000 on April 1." Shelly placed another want ad, offering the note for $7,500, and Frank bought it from her. Almost immediately Steve's Grand Prix broke down. His mechanic showed Steve that the odometer had been doctored and advised Steve that the car wasn't worth repairing. On April 1 Frank demands that Steve pay up, but Steve refuses, claiming he had been sold the car under false pretenses. Does Steve have to pay? If so, why? If not, why not?