Chapter 10: Real Assent

what are the exceptions of minors avoiding contracts?

1) infants are generally liable for the reasonable cost of necessities 2) state statutes variously prohibit disaffirmation for such contracts as insurance, education or medical care, bonding agreements, stocks, or bank accounts. In addition, an infant will lose their power to avoid the contract if the rights of third parties intervene 3) Misrepresentation of age 4) when the infant becomes an adult, they have 2 choices: they may ratify the contract or disaffirm it 5) in most cases of disavowal, the infant's only obligation is to return the goods or repay the consideration; they do not have to have to account for what was wasted, consumed, or damaged during the contract. 6) infants are liable for their torts unless the tort suit is only an indirect method of enforcing a contract

what are the elements necessary to proving fraud?

1) misstatement of fact that is intentionally made and justifiably relied upon 2) the misrepresentation was intentionally made 3) reliance by the victim. they must show that the misrepresentation included assent

what are the two types of Nonfraudulent Misrepresentation?

1) negligent misrepresentation 2) innocent misrepresentation

what are the three requirements for successfully arguing mutual mistake?

1) the mistake relates to a "basic assumption on which the contract was made" 2) the mistake has a material effect on the agreed exchange of performances 3) the party seeking relief does not bear the risk of the mistake

what are the elements of duress by threat?

1) the threat must be improper 2) there must be no reasonable alternative 3) the test for inducement is subjective (the question is whether the threat in fact induced assent by the victim)

what must be done to prove negligent misrepresentation?

a plaintiff must show a negligent misstatement of fact that is material and justifiably relied upon

what is innocent misrepresentation?

a representation that is made in good faith and believed to be true by one making it but that is in fact false

what is misrepresentation? and what are the 2 types?

a statement of fact that is not consistent with the truth fraudulent and non-fraudulent

what are the exceptions to the rule of unilateral mistakes?

if one side knows or should know that the other has made a mistake, he or she may not take advantage of it. A person who makes the mistake of not reading a written document will usually get no relief, nor will relief be afforded to one whose mistake is caused by negligence unless the negligent party would suffer unconscionable hardship if the mistake were not corrected.

what are the elements necessary to prove innocent misrepresentation?

an innocent misstatement of fact that is material and justifiably relied upon

what is a minor (infant)?

are in most states persons younger than 17-years-old; they can avoid their contracts, up to and within a reasonable time after reaching majority, subject to some exceptions and limitations

what is duress by threat?

it is more common than physical duress the perpetrator threatens the victim, who feels there is no reasonable alternative but to assent to the contract. It renders the contract voidable

other than minors, what are the other 2 instances where people lack the capacity to enter into a contract

mentally ill and intoxicated

what is fraud in the inducement?

more common (usually just fraud) is a misstatement of fact that is intentionally made and justifiably relied upon

what is material misrepresentation?

one that would be likely to induce a reasonable person to manifest his assent or that the maker knows...would be likely to induce the recipient to do so

what is undue influence?

unfair persuasion it is a milder form of duress than physical harm or threats. It occurs when the victim is under the domination of the persuader or is one who in a view of the relationship between them, is warranted in believing that the persuader will act in a manner detrimental to the victim's welfare if the victim fails to assent.

what is fraud in the execution?

when a party deceives another party into believing the nature of document is different than what it actually is

what is physical duress?

when a person is forced into entering a contract on threat of physical bodily harm

what is Duress? What are the two types of duress?

when a person is forced to do something against his/her will Physical duress and duress by threat

what is age of majority?

when a person is no longer an infant or a minor

what is a mutual mistake?

where both parties are wrong about the subject of the contract--relief may be granted

what is a unilateral mistake? what is the rule?

where one party makes a mistake the rule: ordinarily a contract is not voidable because on party has made a mistake about the subject matter

what is negligent misrepresentation?

where representation is caused by carelessness