BLAW Chapter 14

Defective Agreements: A voidable contract results if agreement (of either party) is obtained by:

1) fraud 2) misrepresentation 3) mistake 4) undue influence 5) duress 6) is unconscionable.

Unilateral example - See ______________________

14.2 on 324

Mutual example - See ______________________

14.3 on 325

What can arise through the following? - Threat of bodily harm to an individual or to his/her family - Threat of serious loss/damage to property

Duress

What will happen? A customer purchases a dishwasher after talking to a salesperson. The customer receives a different model from the one he originally wanted.

He returns it and cancels the order, because the store did not have the model he originally wanted— it was a mutual mistake.

Fraud/Fraudulent Misrepresentation: The _______________ misstatement or nondisclosure of a material fact made by one party in an attempt to influence the actions of another party is _______. Also commonly referred to as ________________ ___________. Fraud may arise from spoken or written words or by acts or conduct. In order to prove a fraud case, a plaintiff must demonstrate 5 elements: 1. A misstatement or nondisclosure of a material fact; 2. Knowledge of its falsity or with reckless disregard of its truth; 3. Intention of causing the other party to enter into the agreement; 4. Reliance by the injured party; and 5. Harm to the injured party (financial, physical, or both)

INTENTIONAL, fraud, fraudulent misrepresentation

A _______ mistake means that both parties are mistaken about a material fact. Either party can choose to rescind. (Simkin v. Blank considers a case of mutual mistake.)

Mutual

What is this an example of? A construction company starts building a tool shed in a homeowner's backyard. The construction company realized it was at fault for not checking local codes about backyard buildings and HOA (Homeowner's Association) regulations.

The homeowner must understand that they may void the K, but they may not seek additional damages because the construction company's misrepresentation was unintentional.

Misrepresentation or Innocent Misrepresentation: Misrepresentation is the ____________ misstatement or nondisclosure of a material fact that results in inducing another to enter into an agreement to his or her loss. There is a distinction between fraud and misrepresentation because the _________ is different. How is this different than Negligent Misrepresentation? Is it more like fraud or misrepresentation? ....

UNINTENTIONAL, remedy, fraud

What can arise through the following? - Relationships with employers and employees - Physician/nurses and a patient - Teacher and student

Undue influence

A ____________ mistake means that one party has made an error about a material fact. Generally, a unilateral mistake does not present grounds to ______ a contract. Exceptions where rescission may be possible are: when one party made the mistake, but the other party knew or had reason to know of it; the mistake was the result of a mathematical error.

Unilateral, void

Mistake: A mistake is _____________________________________. Mistakes relating to contracts may be concerned with the nature of the subject matter or the quality of the subject matter. Mistake of fact v. Mistake of value - treated very differently!! Court decisions involving mistakes are often complex, and the courts attempt to determine whether the mistake was "unilateral," that is, made by only one party, or whether the mistake was "mutual," that is, made by both parties.

a belief that is not in accord with the facts

Undue Influence: A person has the power to ________ the actions of another because of a special or confidential relationship with that person. When someone uses this power ______________ to his or her personal advantage, it is undue influence. *A contract resulting from the use of undue influence is _______________ at the option of the wrongfully influenced party.

control, improperly, voidable

Puffing/Puffery: There is a distinct difference between a fraudulent statement and a salesperson's "puffing." Most of us have experienced puffing when we visit a car dealership or talk to a salesperson. Puffing refers to _____________ and is directed toward the five _______. Intentional concealment or intentional nondisclosure of material facts is just as fraudulent as making a false statement.

generalities, senses

Defective Agreements: Genuineness, or reality, of agreement is said to be present in a contract when there is a true __________________ of the parties. When courts find an assent to do something is a _________ __________ they will required the parties to obey or follow through with the agreement. A lack of voluntary consent is a __________ to the enforcement of a contract. If there is any misunderstanding or if force or deception was used to obtain the agreement of the other party, the contract is ____________.

meeting of the minds, legal assent, defense, voidable

What are these examples of? "This washing machine is the best buy in town." "This computer is as good as other well-known brands." "The engine in this car has the latest hybrid technology."

puffing

Duress: Duress is the act of applying _________ or improper pressure or influence to a person in order to gain his or her agreement to a contract. *If someone enters into a contract under duress, the injured party can __________ the agreement.

unlawful, dissolve