Genuine Agreement

1. Genuine Agreement Chapter 8 in the business law text

2. “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

3. Mistake • unilateral mistake • bilateral, or mutual, mistake

4. 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

5. 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

6. 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

7. 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

8. 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.

9. 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.

10. Undue 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.