Transcript CHAPTER 8 TEST REVIEW

Genuine Assent
6 PARTS OF A VALID CONTRACT
Offer and Acceptance
Genuine Assent
Consideration
Capacity
Legality
Writing
GENUINE ASSENT
 Entering a contract under your “Own
Free Will”
 NOT being forced (Duress)
 NOT being misled (Misrep or Fraud)
 NOT holding an incorrect belief about
what you are entering into (Mistake)
GENUINE ASSENT
Also known as Genuine
Agreement and Mutual
Assent
What if there is no Genuine
Assent?
Contract is Voidable
Only the injured party may end the
contract agreement
Ratification
Showing Intent to be bound by a
contract
Best way to ratify is a signature
Can ratify through an option
(Payment)
Rescission
Backing out of a transaction by
asking for a return of what you gave
in exchange for what you received
Must occur “PRIOR” to Ratification
Only damage available in a case of
Misrepresentation
Duress
 Using an improper threat or act to
obtain an agreement
 TYPES:
 Illegal conduct
 Threaten to report a crime
 Threaten to sue
 Economic threats
Undue Influence
Type of duress
2 Elements to prove:
Unfair Persuasion
Using a relationship with a
person
MISTAKES
Unilateral- one side holds an
incorrect belief about the Subject
matter of the contract (Voidable)
Bilateral- (Also known as Mutual)
When both sides hold incorrect
beliefs about the subject matter of a
contract (Void)
2 Types of Unilateral Mistakes
Recognized Unilateral Mistake: Mistake is
major (Big) and 1 side knows, but allows the
other side to think everything is as agreed
(Can get recession)
Induced Unilateral Mistake: One side
“encourages” or induces the other side to
make a mistake, the contract is immediately
“Voidable”
Material Facts
Something important in a
contract
Has to do with the main subject
matter
2 types of Mutual Mistakes
Mistake of the Subject Matter- Both
sides hold incorrect beliefs about what
they are agreeing to in a contract (Void)
Mistake of the Law- Both sides agree to
something that turns out to against the
law (May be void and in some states,
the agreement is still valid)
Misrepresentation
Untrue Statement of Fact “Told” to
a person
Material (Important) to the person
making the decision
Relied upon (The person misled
relied upon it to make their
decision to enter the contract)
Fraud
“First” must prove 3 elements of
Misrep (Untrue statement,
material and relied upon)
“Then” prove:
Intent to deceive
Injury
Active Concealment
Intentionally trying to “hide”
something from one side
Ex) Covering up a wall with a hole
in it to make a person think it’s not
damaged
Silence
Seller may remain silent unless one of 3
things happens:
1. When a material fact omits
information
2. When a true statement is made false
3. When the seller knows the other party
has made a mistaken conclusion
Remedies for Misrep and Fraud
Misrepresentation- ONLY
rescission
Fraud- Rescission, compensatory
damages and punitive damages