Business law 12-13

Despite what the original agreement says, if the price of the goods in the modified contract is _____ or more, the modification is _____ unless the requirements of the Code's statute of ____ section are satisfied.

$500 unenforceable frauds

The act requires that a reaffirmation promise be made prior to the date of the discharge and gives the debtor the right to revoke his promise within _____ days after it become enforceble.

30

a person pursues some course of action because of his faith in an assertion made to him. calls:

Actual Reliance

A remedy element associated with innocent misrepresentation of fact is an:

Assertion relating to material fact

Reasons that would remove a promise from the illusory category:

Limits under cancellation (dealer's failure to live up to dealership obligaions or time when cancellation may occur such as no cancelation for the first 90 days Requirement of advance notice of cancelation such as 30 days notice requirement A party's duty of good faith and fair dealing can also limit ther right to terminate and prevent its promise from being considered illusory.

New consideration is not necesary and the abgreement to modify a contract is enforceable

UCC the code

In the contect of business contracts, a promisee's promise not to commit crimes or torts:

can never be consideration

For misrepresentation for fraud to exist, there must have been a _____ _____ between the assertion and the companing party's decision to enter the contract.

causal connection

Once a bankrupt debtor is granted a discharge, creditors no longer have the legal right to collect discharged _____.

debts

An unfortunate act or an error in judgement in ordinary conversation is termed:

mistake

All contracts are based on ______.

persuasion

Freedom of contract includes the freedom to make bad bargins as well as good ones, so promisor's promises are enforceable if they got what they asked for in exchange for making their promises, even if what they asked for was not nearly so ______ in wordly terms as what they promised in ____.

valuable return

Elements to rescind a contract of innocent or fraudulent misrepresentation:

• An untrue assertion of fact is made • An assertion is fraudulent or an asserted fact is material

Basic assumptions on which a contract is founded:

• Existence and identiry of subject matter • The quiality of the subject matter • The quantity of the subject matter

Persuasions involved in contracts:

• Permissible persuasion • Impermissible persuasion

To establish a mutual mistake of fact, the plaintiff must show a clear evidence that:

- Both parties were misataken as to a basic assumption - The mistake materially affects the agreed-upon exchange of performances - The party negatively affected did not assume the risk of the mistake

Most states hold that a seller who knows a latent (hidden) defect that marerially affects the value of the property he is selling has the _____ to mention this defect.

obligations

A person seeiking to rescind a contract must establish that the fact asserted is material if:

the misrepresentation is innocent

_____ ___ ______ set an express statutory time limit on a person's ability to pursue any legal claim.

Statutes of limitation

Any new condisderation furnished by the promisee provides sufficient consideration to support a promise to modify an _____ contract.

existing

Valid contract must consist of an ____, ______, and ______.

offer acceptance consideration

Basic assumptions on which contracts are founded:

- Identity - Existence - Quality - Quantity

A person who tries to avoid the ground of unilateral mistake must show one of the following:

- The nonmistaken party caused or had reason to know of the mistake. - It would be unconscionable to enforce the contract. A court also permit avoidance because of unilateral mistake was such that it would be unconscionble to enforce the contract.

A party is entitled to prevail on a claim of promissory estoppel if:

- The promise is one that the promisor should reasonably expect to induce action or forbearance of a definite and sunstantial character on the part of the promisee - The promise induced such action or forbearance - Injustice can be avoided only by enforcement of the promise

Two important aspects of consideration requirement:

- The requirement tended to limit the scope of a promisor's liability for his promises by insulating him from liability for gratuitious promises and by protecting him against liability for reliance of such promises. - The mechanical application of the requirement often produced unfair results. This potential unfaireness has produced considerable dissatisfaction with the consideration concept.

A contract will be considered be material if :

- it is likely to play a significant role in inducing a reasonable person to enter the contract or - if the person asserting the fact knows that the other person is likely to rely on the fact. - It is material if the seller can rely that the buyer is a reasonable person to enter the contract.

Different areas court would look at

- surrounding facts - was the person isolated and rushed into the contract - access to outsides for advice - was the contract discussed and consummated in the usual time and place - was the contract a reasonable fair - was it signs of being forced into the contract

Fraudent inducement of a sale may be based on claims of fraudulent concealment where the seller who knows of the defect

- takes active steps to cenceal it and prevent the buyer from discovering it - Passively conceals the defect by simply keeping quiet about it

Fraud requires proof of five elements :

1. False statement of material fact 2. Knowledge by the defendant that the repesentation was untrue 3. Intent to induce the plaintiff to act or refrain from acting 4. Justifiable relaince by the victim 5. Injury to the alleged victim as a result.

To rescind a contract because of duress, one must be able to establish both of the following elements:

1. The contract was induced by an improper threat. 2. The victim had no reasonable alternative but to enter into the contract.

Contract can be avoided if the tree following elements are present:

1. The misstake relates to a basic assumption on which the contract was made. 2. The misstake has a material effect on the agreed-upon exchange 3. The party affected by the mistake does not bear the risk of the the mistake.

If a person buy something and then suspect it was induced by fraud and wants to rescind it. How does she act to protect her rights? To rescind a contract based on fraud or any of the other doctrines, she must:

Act Promptly and Unequivocally. She must object promptly upon learing the facts that gave her the right to rescind clearly express her intent to cancel the contract. She must also avoid mixed messages

A person seeking to rescind a contract on the ground of innocent or fraudulent misseresentation must follow these elements:

An untrue assertion of fact was made The fact asserted was material or the assertion was fraudulent The complanining party entered the contract because of his reliance on the assertion The reliance of the complaining party was reasonable

Preexisting Duty and Contract Modification under the UCC: The drafters of the Code sought to _____ many of the problems caused by the consideration requirement by dispensing with it in tow important situations. The code does not require ________ for firm offers. The Code also provides that an agreement to modify a contract for the sale of goods needs no ________ to be binding.

Avoid consideration consideration

For example: Barry a traveling salesman, takes his car to Cheatum Motors for repair. Barry pays Cheatum the full amount previously agreed upon for the repair but refuse to return Barry's car to him unless Barry agrees to pay more than the contract price for the repairs. Because of his urgent need for the return of his car, Barry agrees to this. In this case:

Barry had the alternative of filing a legal action to recover his car. However, this would not be a reasonable alternative for someone who needs the car urgently because the time, expense, and uncetainty involved in pursuing a lawsuit would be considerable. Barry could avoid his agreement to pay more under the theory of Duress.

A promise is supported by a consideration by two ways:

Consideration exists if the promisee in exchange for a promise by the promisor, does or promises to do something the promisee has no legal obligation (no already existed promises) to do. Consideration exists if the promisee refrains, or promises to refrain (avoid), from doing something the promisee has a legal right to do.

Not consideration:

Doing/promising something you had a preexisitng duty to do Nominal consideration (unless actually bargained for) Paying part of a liquidated debt at or after the debt is due Making an illusory promise Past consideration Preexisting moral obligation

Consideration:

Doing/promising something you had no preexisting duty to do Paying part of a liquidated debt prior to the date the debt is due Paying a liquidated debt in a different exchange than originally agreed to Agreeing to settle an unliquidated debt Agreeing not to file lawsuit when you have good faith belief in your claim's validity

- Contract induced by improper threat - Threat leaves party no reasonable alternative but enter or modify contract

Duress

Business compulsion is also known as

Economic Duress

Moore who has contracted to sell goods to Stephens, knows that Stephens needs timely delivery of the goods. Moore threatens to withhold delivery unless Stephens agrees to pay a higher price. This is example on:

Economic duress

terms commonly used to describe situations in which one person induces the formation or modification of a contract by threateneing another person's economic interest.

Economic duress

.What of a threat to file a well-founded lawsuit or prosecution?

Generally, if there is a good faith dispute over a matter a person's threat to file a lawsuit to resolve that dispute is not considered to be improper.

What about if he wants to reward his nephew by giving him a check of $5000 from staying away from those bad things. Should the uncle's promise be enforcable against him?

No because even though his nephew's behavior still passes the legal value test, it was not bargained for and given in exchange for the uncle's promise.

Turner enters into a contract with Acme constructuon company for the construction of a new office building for $350,000. When the construction is partially completed, Acme tells Turner that due to rising labor and materials cost it will stop construction unless Turner agrees to pay an extra $50,000. Turner having already entered into contract to lease office space in the new building, is Turner's promise to pay the extra 50,000 enforcable against him?

No. All Acme has done in exchange for Turner's promise to pay more is build the building, something that Acme had a preexisitng contractual duty to do. Acme's performance is not consideration for Turner's promise to pay more.

the _____ _____ _____ can protect a party to a contract such as Turner from being pressured into paying more because the other party to the contract is trying to take advantage of his situation by demanding an additional amount for performance.

Preexisting duty rule of modification

a "promise" that the promisor should reasonable expect to induce reliance, reliance on the promise by the promisee and injustice to the promisee as a result of that reliance.

Promisory estopel

Example: Acme had promised to finish construction a week before the completion dated called for in the original contract, or had promised to make some change in the original contract specifications such as to install a better grade of carpet.

Since she is making a new exchange for a new promise that had no legal duty from the previous promise. Turner's promise to pay more would then be enforcable because it would be supported by new consideration.

Undue influence cases normally involve these elements:

The relationship between the parties is etiehr one of trust and confidence or one in which the person ecercising the persuation dominates the person being persuaded. The persuatuon is unfair

What degree of wrongfulness is required for a threat to constitute duress?

Traditionally, a person would have to threaten to do something she was no legally entitled to do. This could be such as threaten to commit a crime or a tort.

- Relationship of trust and confidence or dominance - Unfair persuasion

Undue influence

A judgement about unfair persuation. Like duress, it inlvolves wrongful pressure exterted on a person during the barging process. The pressure is exerted through persuasion rather than through coercion.

Undue influence

______ ______ cases involve people who through they have capacity to enter a contract, are in a position of particular vulnerability in relationship to the other party to the contract. This relationship can be one of ______ and confidence where the person being influenced and believeds that the other party is looking out for his interest.

Undue influence trust

Roce, an elderly man, is dependent on his housekeeper, to care for him. Smith persuades Roce to withdraw most of his life savings from the bank and make an interest free loan to her. Example on:

Unfair persuasion If the persuasuon Smith used was unfair, the transaction could be "voided" because of undue influence.

The settlement of an unliquidated debt is called an _____ and ____. When an accord and satisfaction has occurded, the creditor cannot maintain an action to recover the remainder of the debt that he alleges is due (skyldig).

accord satisfaction

Consideration can be an ____ in the case of unilateral contract or a ____ in the case of a bilateral contract. An act or a promise can have legal value in one or two ways.

act promise

The inequality of an exchange can be denied legal basis with the rule against considering the ____ ____ _____.

adequacy of consisderation

The person complaning for duress must be able to prove that the coercive nature of the improper threat was such that he had no reasonable ______ but to enter or modify the contract.

alternative

Fraud necessitates proof that:

an untrue assertion is made with scienter

Nondisclosure can also be the equivalent of an ____ ____ _____.

assertion of fact

Even if these elements are present, the person who is harmed by the mistake cannot ______ the contract if he is considered to bear the risk of mistake. Courts have the power to allocate the risk of a mistake to the negatively affected person whenever it is reasonvale under the circumstances to do so.

avoid

Even if the mistake is mutual the negatively affected party will not have the right to ____ the contract unless the mistake concerns a basic assumption on which the contract was ____.

avoid based

The promisee's act or promise must have been ______ for and given in exchange for the promisor's promise. In effect, it must be the ____ that the promisor asked for in ______ for making his promise.

bargained price exchange

Consideration ensures the promise to be enforced was ______ for and given in exchange for a reciprocal ____ or ____.

bargained promise act

Most courts refuse to enforce such agreements unless they find that the stated consideration was truly ______ for.

bargin

consideration can promote _____ and ______ in commercial transactions by denying legal effect to what would otherwise be a possible basis for challenging the enforceability of a contract - the inequality of the exchange.

certainty predictability

In order for a promissory estoppel to be valid it must be a ____ and ____ promise, the promisee must rely on the promise, and the reliance should be depending on a definite person.

clear definite

A common ______ strategy is to threaten to breach the contract unless the other party agrees to modify its terms.

coercive

Contracts in which one party to the agreement agrees to buy all of the other party's production of a particular commodity or to supply all of another party's needs for particular commodity (requirements contracts) are ____ ____ ______ that serve legitimate business purposes.

common business transactions

General rule: performing or agreeing to perform a preexisitng duty is not ______. This seems fair because the promisor in such a case has effectively made a gratuitous (free) promise, since she was already entitled to the promisee's performance.

consideration

If the promosee's promise is illusory because it really does not bind the promisee to do or refrain from doing anything, such a promise could not serve as _______.

consideration

If the the promisor did not ask for anything in exchange for making her promise or if what the promisor asked for did not have legal value, her promise is not enforceable against her because it is not supported by ______.

consideration

Promisory estoppel can be made without formal _________, when a promisor has made a promise to a promisee who then relies on that promise to his future deprivation.

consideration

The General Common law rule on contract modifications holds that an agreement to modify an existing contract requires some new ______ to be binding. "that creates a new contract"

consideration

Promisory estoppel is now widely used as a _____ substitute, not only in donative promise cases but also in cases involving _____ promises contemplating a bargained for exchange

consideration commercial

Under the Code, No new _____ is necessary and the agreement to modify (change) the contract is enforceable (verkställbart).

consideration enforceable

Past consideration, is not ________ at all. Past consideration is an act or other benefit given in the ______ that was not given in _______ for the promise in question. Because the past act was not given in exchange for the _____ promise, it cannot be consideration.

consideration past exchange present

An agreement by a promisee to forbear from pursuing a legal claim against a promisor can be valid _____ to support a return promise, usually to pay a sum of money by a promisor.

consideration (övervägelse)

many courts also enforce an agreement to modify (change) an existing ________ if the modification resulted from (oförutsedda) unforceen circumstances that a party could not reasonable be expected to have foreseen (foreknow), and which made that party's performance far more difficult than the parties originally anicipated.

contract

Composition agreements are agreements between a _____ and two or more _____ who agree to accept as full payment a stated percentage of their liquidated claims against the debtor at or after the date on which those claims are payable.

debtor creditor payable

Fraud is the type of misrepresentation that is commited knowingly, with the intent to _____.

deceive

The code legitimizes requirements and output contracts. It addresses the concern about the potential for exploiation by limiting a party's ____ to those quantity needs that occur in good faith and are not unreasonably disproportionated.

demands

According to classical contract law, ______ promises were unenforcable because they were not supported by consideration.

donative

A wrongful coercion that induces a person to modify or enter a contract is known as:

duress

The legal value of consideration: promisees do or promise to do, something in exchange for a promisor's promise that they had no prior legal ____ to do.

duty

This definition does not require that an act or a promise have _____ value to amount of consideration.

economic

when one party offers a dispropotionately small amount of money in settlemtn of a debt and refuses to pay more. Such case can exert great economic pressure on a creditor who is in a desperate financial situation to accept the settlement because he cannot afford the time and expense of bringing a lawsuit. Example on:

economic duress

Cases where the injured person only seeks rescission (cancelation) of the contract, he doesnt need to prove _____ _____.

economic injury

As long as the promisee has given legal value, the agreement will be _______. This is even if the promisee gave is worth substantially (väsentliga värde) less than what the promisor promised in return.

enforcable

Not all agreements are ______ contracts.

enforcable

Those agreements (illusory) are often said to lack the mutuality of obligation required for an agreement to be _____.

enforcable

The requirement of consideration means that a promisee must pay the price that the promisor asked to gain the right to _____ the promisor's promise.

enforce

Example: If Acme had requested the extra payment because abnormal subsurface rock formations made the construction site far more costly and time-consuming than it could have been reasonable expected. In this case, many courts would:

enforce Turner's promise to pay more.

Common law : Gratuitous (free) promises are not ______. Only promises supported by _________ were enforcable in a court of law. This was a pupose of enforce free made bargins.

enforceable consideration

General rule of consideration: If the (impropriet) inadequacy of consideration is apparent in the agreement, most courts conclude that the agreement was a discussed (hidden) gift rather than an _______ bargin. An agreement for an unequal exchange of money or identical goods without containing other terms would more likely be ______.

enforceable unenforcable

Duress is wrongful coercion (force) that induces a person to _____ or ____ a contract.

enter modify

Most courts apply the preexisitng duty rule in a manner calculated to reach fair results, because several ____ to the rule can be used to ____ a fair modification agreement.

exceptions enforce

Because contracts are created by the will of the parties, they can be terminated in the same way. Each party agrees to release the other party from his contractual obligations in ______ for the other party's promise to do the same.

exchange

Mutual agreement terminates all duties owed under the original agreement. A court is likely to thake this approach, only when it is convinced that the modification agreement was ____ and free from ______.

fair coercion (duress)

Restatement - provides that a relying party's failure to discover facts before entering the contract does not make his reliance unjustifiable unless the degree of his fault was so extreme to a failure to act in good faith and in accodance with reasonable standards of ___ ___.

fair dealing

Unliquidated Debts - is a good ______ dispute about either the existence or the amount of debts makes the debt an unliquidated debt.

faith

General rule, the promise must have a good _____ belief in the _____ of his or her claim before forbearance (patience) amounts to consideration.

faith validity

Misstake about matters such as a party's ______ ability or market conditions usually would not give rise to avoidance of the contract.

financial

Gross inadequacy (imperfection) of consideration may also give rise to an inference of _____, _____, and lack of _____, unconsciounability, or some other indepenedent basis for setting aside a contract.

fraud duress capacity

Modification agreements under the Code are still subject to scrutiny under the ____ Code principles of good faith and unconscionability, so unfair agreements are the product of coercion (force/duress) are likely to be unenforced (obefogat).

general

Nondisclosure differes from concealment in that concealemtn involves the active ____ of a fact, whereas nondisclosure is the _____ to volunteer information.

hiding failure

The adversely affected party also bears the risk of mistake when he contracts with counscious awareness that he is ______ or has limited _____ about a fact - in other words, he knows that he does not know the true state of affairs about a particular area but he binds himself to perform anyway.

ignorant information

A promisee's promise is _____ if it really does not bind the promisee to do or refrain from doing anything, and such a promise will not serve as consideration.

illusory

A right to cancel or terminate at any time, for any reason, and without any notice would clearly render _____ any other promise by the party possessing such a right.

illusory

The fact that an agreement allows one or both of the parties to cancel or teminate their contractual obligations does not necessary mean that the party with the power to cancel has given an _____ promise.

illusory

Under some circumstances, threats to institute legal actions can be considered _____ threats that will constitute duress.

improper

A threat to file either a civil or a criminal suit against someone without a legal basis for doing so would clearly be _____.

improper especially if it is in bad faith

In tort actions, in which the plaintiff is seeking to recover damages for deceit (fraud), the plainfiff would have to establish another element; ____. He would have to prove that he had suffered actual economic injury because of his reliance on the fraudulent assertion.

injury

The tort liability of a person who commits fraud is different from that of a person who commits _____ misrepresentation

innocent

A contract may be voidable even if the person making the misrepresentation believed in good faith that what he says is true. Both _____ ______ or _____ gives the complaining party the right to rescind (revoke) a contract.

innocent misrepresentation fraud

A person making a misrepresentation would be considered to do so _____ if she did not have a basis for making the statement or even if she just made the statement without being confident that it was true

knowingly

A promise can generally not be enforced against the person who made it (the promisor) unless the promise was made (the promisee) with something of _____ ____ in exchange for the promise.

legal value

Example: Thoma's promise to pay Brown $100 a year in exchange for Brown's promise not to burn Thoma's barn would not be enforcable against Thomas. Since Brown has a preexisting duty not to burn Thomas barn, his promise lacks ____ _____.

legal value

Exempel: An uncle's promise to pay his nephew $5000 for refraining from smoking, drinking, swearing, and other delightful pastimes until his 21st birthday was supported by consideration because the nephew had given a ____ _____ by refraining from participation in the prohibited activities.

legal value

Exempel; if someone promise to buy "all the sugar that I want" or to "paint your house if I feel like it" would not be sufficient consideration for a promisor's return promise to sell sugar or hire a painter. In this cases there is no ______ ______ in exchange.

legal value

If in exchange for the promisor's promise of doing, or agrees not to do, something she has a legal right to do, also provides ____ _____.

legal value

A common definition of consideration is _____, ____ for and given in _____ for an act or a promise.

legal value bargained exchange

The courts do not ask if a promisee's act was worth what the promisor gave in return for it as long as the fact satisfies the____ ____ ____.

legal value test.

A creditor promise to discharge an _____ debt for part payment of the debt afte its due date is unenforcable for lack of consideration.

liquidated

An ______ debt that is both due and certain, the parties have no good faith dispute about either the existence or the amount of the original debt.

liquidated

If the misrepresentation was innocent, the person seeking to recind the contract must establish that the fact asserted was ___

material

The concealment of a fact through some active conduct intended to prevent the other party from discovering the fact is considered to be the equivalent of assertion. Like false statement of fact, concealment can be the basis for a claim of ______ or ____.

misrepresentation fraud

Example: If summers is offering his house to sale and paints the ceilings to conceal the fact that the roof leaks, his active concealment may be considered an assertion of fact.

misrepresentation or fraud

An erroneous belief or predicition about facts that might occur in the future would not qualify as a _____.

mistake

Fox sell a ring for $65 and where both belived it was a crystal stone. But the stone was worth much more $2,500. Now Fox is suffering because of the loss of the ring. In this cases, the affected person of the mistake can avoid the contract under the doctrine of _____.

mistake

Courts can also enforce fair ________ agreements by holding that the parties mutually agreed to terminate their original ______ and then entered a new one.

modification contract

If no other consideration is exchanged it is called _____ _____. Such agreements attempts to make gratuitous ____ ____ look like true ____ by reciting a nonexistend consideration.

nominal consideration (free) promises bargins

Example, if you are selling a old safe you never been able to open, and you sell it to your friend for 25$. When your friend open it he finds 10,000 in cash. In this case, you would:

not be able to rescind the contract because you in one way gambled on your limited knowledge and lost.

Unilateral mistake - exist when only _____ of the parties makes a mistake about a basic assumption on which he made the contract.

one

A promise made by ____ party to a contract normally _____ be enforced by the other party to the contract unless the party to whom the promise was made provided some promis or performance in _____ for the promose sought to be enforced.

one cannot exchange

The Code contins two provisions to protect people from claims that an agreement has been modified (changed). If the original agreement requires any modification to be in writing, an ____ modification is _______.

oral unenforceable

A far more common type of duress occurs when a person is iduced to enter a contract by a threat of ______, ______, or ______ ______.

physical emotional economic harm

The most important preexisting duty cases are those involving ______ contractural duties. These cases generally occur when the parties to an existing contract agree to _____ that contract.

preexisting modify

In the (frånvaro) absence of consideration in Option contract, the court must decide whether promissory estoppel applies to a ______ made by an offeree to keep an offer open for a given period of time.

promise

Jane buys a cellphone from a local store. Later, she realizes that the cellphone is a refurbished product. Instead of rescinding the contract, she claims freebies and discounts on cellphone accessories from the store owner. This scenario is an example of ______.

ratification

Under traditional law, a person would not be entitled to rely on the other party's assertions about facts that are a matter of public record or that could be discovered through a ______ inspection of available documents or records.

reasonable

Sometimes, Mutual mistake takes the form of erroneous expression of an agreement, caused by error in drafting or typing a contract. In such cases, the remedy is ______ of the writing rather than ______ of the contract.

reformation avoidance

A person's fault in failing to know or discover facts before entering the contract will not bar ____ unless his fault amounted to a failure to act in ____ ____.

relief good faith

The doctrine of undue influence was developed to give ____ to persons who are _____ persuaded to enter into a contract while in a position of ______ that makes them vulnerale to being preyed upon by those they trust or fear.

relif unfairly weakness

The intent to deceive - the defendant knowingly made a misstatement of fact to a person who was likely to ____ on it.

rely

under uniform commercial code. No election of _____ is required in contracts for the sales of goods.

remedies (treatment)

For a promise to serve as consideration in a bilateral contract, the promisee must have promised to do, or to refrain from doing something at the promisor's _____.

request

This means that the person whose consent was not real has the power to ______ the contract.

rescin (cancel)

Ratification ends the right to ______.

rescind

Under every state law, a person injured by fraud in a contract for the sales of goods can both _____ the contract and sue for ____.

rescind damages

A fact of innocent misrepresentation, the contract remedu for fraudulent misrepresentation is _____.

rescission (not valid)

A person who rescinds a contract is entitled to the _____ of anything

return

Example: If a buyer contracted to accept property "as it is", he may be considered to have accepted the ____ that his assumption about the quality of the property may be erroneous (incorrect).

risk

As a general rule, promises made to ____ a preexisting moral obligation are ______ for lack of consideration.

satisfy unenforcable

The legal term for this knowledge of falsity, which distinguished fraud from innocent misrepresentation, is:

scienter

Ratification of voidable contract means :

that a person who had the right to rescind has elected not to do so. A contract that is deemed voidable can be corrected through the process of ratification.

It is not enough for a person claiming mistake to show that the exchange is something different from what he excpected. He must show:

that the imbalanced caused by the mistake is to serve that it would be unfair for the law to require him to perform the contract. He have better chance if he show that the contract is less desirable for him because of the mistake and also that the other party has received an unbargained for advantage.

Missrepresentation is an assertion that is not in accord with the _____.

truth

A mistake is a belief about a fact that is not in accord with the truth. The mistake must relate to facts as they exist at the ____ the contract is created.

truth time

Donative promises were _____ because they were not supported by consideration. Donative promises does not seek or require any bargined for exchange.

unenforcable

If Smith the owner of a liquor store, promises to pay Fawcett, a police officier whose beat includes Smith's store, 50% a week to keen an eye on the store while walking her beat. Smith's promise is ______ because Fawcett has agreed to do something that she already has a dity to do.

unenforcable

If the promisor did not seek for any exchange for the promise, the promise will be ______ because it lacks of ______.

unenforceable consideration

The purpose of the doctrine of mistake is to prevent _______ and ______ for losses that result when the parties are misstaken about a fact central to their contract.

unexpected unbargained

Mechanical application of the rule could also produce ___ results when the parties have freely agreed to a fair modification of their contract.

unfair

One important factor that affects the right to avoid is if the mistake was made by one of the parties ____ ______ or by both parties ___ ____.

unilateral mistake mutual mistake

An _____ debt involves a good faith dispute about either the existence or the amount of a debt.

unliquidated

To show unconscionability, the mistaken party must have to convince the court that the consequences of the mistake would be serve enough to make the contract _______, _______ or ______ if it were enforced.

unreasonably harsh oppressive

To riscind a contract because of duress, one must be able to establish that the:

victim had no reasonable alternative but to enter into the contract.

Contracts induced by misrepresentation, fraud, mistake, duress, or undue influence are generally considered to be _____.

voidable

Under the contract law, a contract is ______ on the ground of mutual mistake existing at the time of contract formation.

voidable

When a person enters a contract because of his justifiable reliance on misrepresentation about some important fact, the contract is ______.

voidable

One of the things that separates a contract from an unenforcable social promise is that a contract requires ______ agreement by two or more parties.

voluntary

Most states requiring that the new promise (reaffirmation) to be in ______ in order to be enforceable.

writing

Other courts today follow the Restatement position that, to be duress, the threat need to be _____ or _____ but must be improper, that is, improper to use a leverage to _____ a contract.

wrongful illegal induce

Misrepresentations can be either:

• Innocent (not intentionally deceptive) • Fraudulent (made with knowledge of falsity and intent to deceive)

True statement about Bankruptcy Reform Act:

• It made it difficult for debitors to reaffirm debts discharged in bankruptsy • It requires bankruptsy court approval of reaffirmations by individual debtors • It gives the debtor the right to revoke his promise within 30 days after it becomes enforcable

A purchaser claiming he was fraudulently induced to enter into a sales contract has an election of remedies:

• Promtly after discovering the fraud he may rescind the contract • He may affirm the contract and sue for damages resulting from the fraud.

Undue influence:

• The persuasion is unfair • The relationship between the involved parties is one of trust and confidence.

When a party bear the risk of a mistake:

• When the party is aware, at the time the contract is made, the he or she has only limited knowledge of the facts to which the mistake relates • When the risk is allocated to the party by agreement of the parties.

Contracts that are considered voidable:

• When they are induced by mistake or misrepresentation • Whe they are brought about fraud