Chapter 7 genuineness of assent
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CHAPTER 7 Genuineness of Assent. 7-1Duress and Undue Influence 7-2Mistake, Misrepresentation, and Fraud. 7-1 Duress and Undue Influence. GOALS Recognize when genuine assent is not present Identify the two key elements in undue influence. FOCUS. Scenario

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CHAPTER 7 Genuineness of Assent

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Chapter 7 genuineness of assent

CHAPTER 7Genuineness of Assent

7-1Duress and Undue Influence

7-2Mistake, Misrepresentation, and Fraud


7 1 duress and undue influence

7-1Duress and Undue Influence

GOALS

  • Recognize when genuine assent is not present

  • Identify the two key elements in undue influence

Chapter 7


Focus

FOCUS

Scenario

  • The Thompsons were told that if they did not sign a contract to repay a $2,000 loan at 40 percent interest, their son would be in danger of physical harm. Afraid that their son would be hurt, the Thompsons signed the contract.

    Questions

  • Is the contract enforceable?

  • Why or why not?

Chapter 7


Genuine assent and duress

GENUINE ASSENT AND DURESS

  • Genuine assent

  • Duress

    • Threats of illegal conduct

    • Threats to report crimes

    • Threats to sue

    • Economic threats

Sign this or else!!

Chapter 7


Undue influence and assent

UNDUE INFLUENCE AND ASSENT

Undue influence is wrongfully dominating another party when you are in a position of trust.

  • The relationship

  • Unfair persuasion

Chapter 7


7 2 mistake misrepresentation and fraud

7-2Mistake, Misrepresentation, and Fraud

GOALS

  • Recognize the types of mistakes that can make a contract voidable or void

  • List the criteria for a statement to be treated as a misrepresentation

  • Define fraud and describe the remedies for it

Chapter 7


Focus1

FOCUS

Scenario

  • Jane contracts with Mike to purchase one of his two skateboards. Jane thinks she has bought the red one, a premier skateboard. Mike thinks Jane has bought the blue one, his less valuable skateboard.

    Question

  • Does a contract exist?

Chapter 7


What are the types of contractual mistakes

WHAT ARE THE TYPES OF CONTRACTUAL MISTAKES?

  • Unilateral mistakes: only one person is mistaken (see What’s Your Verdict)

  • Mutual mistakes: neither party reallyunderstands thecontract details

BOTH OF THESE TYPES OF MISTAKES DO NOT NECESSARILY INVALIDATE THE CONTRACT!!!


What is misrepresentation

WHAT IS MISREPRESENTATION?

  • Untrue statement of fact

    • Active concealment: concealing something in order to substitute for a statement of fact (i.e. paint over a huge crack in the wall in order to sell a house)

    • Silence: three situations when you HAVE to break silence

      • Omitting important info

      • True statement is made false

      • When seller knows buyer has made a basic mistaken assumption

Chapter 7


What is misrepresentation cont

WHAT IS MISREPRESENTATION? (cont)

  • Materiality: 3 ways untrue statement can be material

    • Statement causes person to contract (i.e. miles on a vehicle vs. miles since rebuilt)

    • Defendant knows plaintiff would rely on the statement (i.e. plaintiff buys car based on maintenance record and seller mis-stated maintenance)

    • Defendant knew the statement was false

  • Reasonable reliance: no misrep. Unless defendant relied on information

Chapter 7


Fraud

FRAUD

  • The misrepresentation must be intentional or reckless: deliberately lied or concealed fact

  • The misrepresentation or concealment must injure: proof of injury (i.e. purchased a car for $10,000 that had an unknown defect and was actually worth $5,000)

SEE HERE!!

Chapter 7


Remedies for fraud

REMEDIES FOR FRAUD

  • Rescission: rescind the contract and get money or item back

  • Damages: Recover actual damages

  • Punitive damages:damages awardedin order to preventfrom happeningagain.

Alaska Fraud Protection

Chapter 7


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