Genuine Agreement

Genuine Agreement

Chapter 8 in the business law text

“Meeting of the Minds”

Offeror and offeree must both agree on the contractual terms.

If there is no “meeting of the minds” there is no contract

Mistake

unilateral mistake bilateral, or mutual, mistake

Unilateral Mistake

an error on the part of one of the parties to the contract

This ordinarily does not make the contract voidable.

Types of unilateral mistake

– as to the nature of the agreement

– as to the identity of a party

Bilateral Mistake

an error on the part of both (or all) of the parties to the contract

This makes the contract voidable by either party.

Types of bilateral mistake

– as to the possibility of performance

– as to the subject matter

Fraud (deceit)

deliberate deception to secure an unfair or unlawful gain

Persons induced into a contract by fraud have a choice.

– rescind, or cancel the contract

– sue for monetary damages

Fraud - the five elements

false representation of fact party making the representation must

know it’s false representation made with the intent it be

relied upon reasonable reliance by innocent party on

the representation monetary loss

Innocent Misrepresentation

representation which turns out to be false but which was believed to be true at the time it was made

The other party may rescind the contract but may not sue for monetary damages.

Duress overcoming a person’s will be use of force

or by threat of force or bodily harm If actual force is used, the contract is void. If the threat of force is used, the contract is

voidable by the innocent party.– The threat may be to the innocent party

or to a family member.

Undue InfluenceUndue Influence

unfair and improper persuasive pressure exercised by one person in a relationship of trust with another person

The contract is voidable by the innocent party.