Transcript Genuine Assent

Chapter 7 Genuine AssentO Determining whether a true and
complete agreement exists
O Valid
Terms to consider:
O Legally binding enforceable agreement
O Void
O Unenforceable by law
O Voidable
O The right for an injured party to backout
O Rescission
O The right for an injured party to get back
consideration
O Ratification
O Conduct suggesting the injured party intends to
be bound to a contract
Duress- improper threats or
acts to obtain an agreement
(voidable)
O Threats of illegal conduct
O A criminal or civil wrong to create an agreement
O Threats to report crimes
O Used to coerce the criminal to create an agreement
O Threats to sue
O Threat of an unrelated lawsuit to create an
agreement
O Economic threats
O Using economic power over another to create an
agreement
O Courts look at the threat and alternatives to see if
Duress exists
Undue Influence- One party is
in a position of trust and
wrongfully dominates the
other
O 2 components analyzed by law:
O The relationship
O Unfair persuasion
Mistakes in contracts
O Unilateral mistake
O One party holds an incorrect belief about the
terms of a contract
O If misrepresentation or fraud is not present, the
contract is considered valid
O Recognized unilateral mistake
O The other party should bring mistake to light
O Courts may grant rescission
Mistakes in contracts
O Induced unilateral mistake
O The other party has encouraged the mistake
O Voidable
O Ex. Cubic zirconia in a tray of diamonds
O Mutual (bilateral) mistake
O Both parties hold an incorrect belief about the
terms of a contract
O Void if:
O Material fact (important)
O Not applicable to the law (ignorance of law is not a
defense)
Misrepresentation in contracts
O Innocent misrepresentation
O Party unknowingly misrepresented
information
O Fraudulent misrepresentation
O Party knowingly misrepresented information
Both forms make a contract voidable
Elements of innocent
misrepresentation:
O 1. Untrue statement of fact
O Based on past or existing information
O Fact rather than opinion
O Experts opinion can be viewed as fact
O Active concealment- substitute for false
statement
O Silence- contracts require full disclosure
O Ex. Last night’s flood
Elements of innocent
misrepresentation:
O 2. Materiality- significant information
O Three ways statement can be material
O A. statement would cause a reasonable person
to contract
O B. statement was important to contract
O C. defendant knew statement was false (makes
it material regardless of importance)
Elements of innocent
misrepresentation:
O 3. Reasonable reliance- victim relied on the
statement
O Ex. Seller says one thing, but inspection
proves it wrong (no reliance)
Elements of fraud
O The prior three elements along with the
following are necessary to prove fraud
O 4. Intent to deceive
O 5. Injury resulted from the
misrepresentation
Remedies:
O Innocent misrepresentation- usually results
in rescission
O FraudO Rescission
O Compensatory damages
O Compensation for loss
O Punitive damages
O To deter the defendant from injuring again