Business Law Chapter 17: Legal Assent

Fraudulent (Intentional) Misrepresentation

A consciously false representation of a material fact intended to mislead the other party. Requirements to find fraudulent misrepresentation: 1. A false statement about a past or existing fact that is material to the contract. 2. Intent to deceive. 3. Justifiable reliance on the false statement by the innocent party to the agreement.

Nondisclosure

A failure to provide pertinent information about the projected contract.

Legal Assent

A promise the courts will require the parties to obey. Without legal assent, contract may be voidable. A voidable contract can be rescinded, or canceled, permitting the person who canceled the contract to require the return of everything she gave the other party.

Mistake of Fact

An erroneous belief about the facts of the contract at the time the contract is concluded. Mistake of fact will result in legal assent being absent. Mistake can be unilateral or mutual.

Misrepresentation

An untruthful assertion by one of the parties about that material fact; it prevents the parties from having the mental agreement necessary for a legal contract.

Duress

Occurs when one party is forced into the agreement by the wrongful act of another. Examples included threatening physical harm, extortion, to file a criminal lawsuit, or other's economic interests.

Innocent Misrepresentation

Results from a false statement about a fact material to an agreement that the person making it believed to be true. The person had no knowledge of the claim's falsity. Misled party can rescind contract but cannot sue for damaged.

Undue Influence

Special relationships in which one person takes advantage of a dominant position in a relationship to unfairly persuade the other and interfere with that person's ability to make his or her own decision.

Concealment

The active hiding of the truth about a material fact.

Negligent Misrepresentation

When one party makes a statement of material fact that he thinks is true and he should have known the truth by using reasonable care to discover or reveal it.