genuineness of assent chapter 7
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Genuineness of Assent Chapter 7. Genuine Assent. Genuine Assent – true and complete agreement. Voidable – without genuine assent the contract is voidable. Rescission. Rescission – backing out of the transaction by asking for return what you gave and offering to give back what you received. - PowerPoint PPT PresentationTRANSCRIPT
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Genuineness of AssentChapter 7
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Genuine Assent
• Genuine Assent – true and complete agreement.
• Voidable – without genuine assent the contract is voidable.
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Rescission
• Rescission – backing out of the transaction by asking for return what you gave and offering to give back what you received.
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Ratification
• Ratification – conduct suggesting you intend to be bound by the contract.
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Duress
• Duress – occurs when one party uses and improper threat or act to obtain an expression of agreement.
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Threat to Report Crimes
• If you use the threat to report a crime to get someone to agree to a contract this is still duress.
• FYI – the above act might also be considered extortion.
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Threat to Sue
• If you threaten to sue someone for an unrelated event to force them into a contract this is duress as well.
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Economic Threats
• If you threaten someone economically in regards to an existing contract agreement, this modification to the contract is duress.
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Undue Influence
• Undue Influence – occurs when one party to the contract is in a position of trust and wrongfully dominates the other party.
• When Undue Influence happens the courts look at:– The Relationship
– Unfair Persuasion
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The Relationship
• A relationship of trust, confidence, and authority must exist between both parties in the contract.
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Unfair Persuasion
• Evidence of unfair persuasion is usually found in the terms of the contract itself.
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Unilateral Mistake
• Unilateral Mistake – occurs when only one party holds an incorrect believe about the facts related to the contract.
• Generally a unilateral mistake does not affect the validity of the contract.
• “Experience is the name everyone gives to their mistakes.”Oscar Wilde
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Mutual Mistake
• Also known as a Bilateral Mistake
• Mutual Mistake – is when both parties have a incorrect belief about an important fact (called Material Facts) in the contract.
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Void Contracts Due to a Mutual Mistake
• A mutual mistake can make a contract void (without legal effect)
• “A man who has committed a mistake and doesn't correct it is committing another mistake.” Confucius
• HOWEVER: Mutual mistakes made about applicable laws do not void a contract.– All persons are presumed to know the law.
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Innocent Misrepresentation
• When you make a mistake about a material fact in a contract without knowing it.
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Fraudulent Misrepresentation
• When you make a mistake about a material fact in a contract and are aware that you are doing so.
• Statements are treated as misrepresentations by the law only if:– The untrue statement is one of fact, or there is
active concealment.– The statement is material to the transaction.– The victim reasonably relied on the statement.
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Untrue Statement of Fact
• The misrepresentation of statement must be one of fact rather than opinion.
• When an expert expresses and opinion the law will treat it as a fact.
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Active Concealment
• Active concealment – is the substitute of a false statement of fact.
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Silence
• In most cases the seller may remain silent about defects.
• HOWEVER: there are three situations where the seller must disclose defects.–Where a statement of material fact omits important
information. –When a true statement is made false by subsequent
events.–When one party knows the other party has made a
basic mistaken assumption.
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Materiality
• The untrue statement must be determined to be material (important and relevant).
• A statement is material if:– It would cause a reasonable person to contract.
– The defendant knew the plaintiff would rely on the statement.
– If the defendant knew the statement was false.
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Reasonable Reliance
• Even if a statement is material, there is no representation unless the victim reasonably relied on it.
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Fraud
• Fraud – all of the elements of misrepresentation must be proven and the additional elements of: intent and injury.
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The Misrepresentation Must be Intentional or Reckless
• The misrepresentation must be intended to induce the victim to contract.
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The Misrepresentation or Concealment Must Injure.
• There must be proof of injury.
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Remedies for Fraud
• Rescission – the victim may back out of the contract.– Anything you received must be returned.
• Damages – the defrauded party may choose to ratify the agreement then seek damages for loss created by the fraud.