BL Assignment 12

fraudulent misrepresentation refers only to the misrepresentation that is consciously false and is intended to mislead another. The person making the fraudulent misrepresentation knows or believes that the assertion is false or knows that she or he does not have a basis (stated or implied) for the assertion. typically fradulent misrepresentation consists of the following elements

1) a misrepresentation of a material fact must occur 2) there must be an intent to deceive 3) the innocent party must justifiably rely on the misrepresentation 4) to collect damages, a party must have been harmed as a result of the misrepresentation

The general rule of unilateral mistakes has two excepts. the contract may be enforceable if

1) the other party to the contract knows or should have known that a mistake was made 2) the error was due to a substantial mathematical mistake in addition, subtraction, division or multiplication and was made inadvertently and with out gross (extreme ) negligence. If, for instance, a contractor's bid was significantly low because he or she had made a mistake in addition when totalling estimated costs, any contract resulting from the bid normally may be rescinded. Of course in both cases the mistake must still involve some material fact

material fact

a fact that a reasonable person would consider important when determining his or her course of action

The misrepresentation can occur by _____ or ______.

actions, words

duress

agreement to the terms of a contract is not voluntary if one of the parties is forced into the agreement. the use of threats to force a party to enter into a contract is referred to as _______. In addition, blackmail or extortion to induce consent to a contract constitutes this. It is a defense to the enforcement of a contract and a ground for the rescission of a contract.

undue influence

arises from relationships in which one party can greatly influence another party, thus overcoming the party's free will. A contract entered under excessive or _____ ______ lacks voluntary consent and is therefore voidable

Mistakes of fact occur in two forms ________ and _______.

bilateral, unilateral

A contract entered into by a mentally incompetent person (whom a court has not previously declared incompetent) may also be valid if the person had ______ at the time the contract was ________. Some people who are incompetent due to age or illness have lucid intervals- temporary periods of sufficient intelligence, judgment, and will. During such intervals, they will be considered to have legal capacity to enter into contracts.

capacity, formed

Lack of voluntary consent can be used as a _______ a contracts enforcability

defense

If a contract is voidable because one party was intoxicated, that person has the option of _________ it while intoxicated and for a reasonable time after becoming sober. If despite intoxication, the person understood the legal consequences of the agreement, the contract is _________

dissafirming, enforceable

Only a mistake of _______ makes a contract ________. the mistake must also involve some material fact- a fact that a reasonable person would consider important when determining his or her course of action

fact, voidable

Undue influence can arise from a number of different ________ relationships, such as phyisican-patient, husband-wife, guardian-ward, parent-child, etc. When a contract ______ the dominant party in a fiduciary relationship, the court will often _______ that the contract was made under undue influence

fiduciary, enriches, presume

If a court has not previously judged a person to be mentally incompetent but the person was incompetent at the time the contract was _________, the contract may be _______. A contract is ________ if the person did not know he or she was entering into the contract or lacked the mental capacity to comprehend its nature, purpose and consequences

formed, voidable, voidable

most courts do not require a showing of injury when the action is to rescind the contract. the courts hold that because recission returns the parties to the position they held before the contract was made, a showing of injury to the innocent party is unnecessary. In contrast, to recover damages caused by _______, proof of harm is universally required. The measure of ______ is ordinarily equal to the property's value had it been delivered or represented, less the actual price paid for the property.

fraud, damages

Although fraud is a tort, it also affects the authenticity of the innocent party's consent to the contract. When an innocent party is __________ incuded to enter into a contract, the contract normally can be avoided because the party has not _______ consented to its terms. Ordinarily, the innocent party can either rescind the contract and be restored to her or his original position or enforce the contract and seek damages for any harms resulting from the fraud

fraudulently, voluntarily

The essential feature of undue influence is that the party being taken advantage of does not, in reality, exercise ____ _____ in entering into a ______. It is not enough that a person is elderly or suffers from physical or mental impairment, there must be clear and convincing evidence that the person did not act out of his or her own will. Simiarily, the extistence of a fiduciary relationship alone is unsufficient to prove undue influence

free will, contract

Mistakes of value

if a mistake concerns the future market value or quality of the object of a contract, the mistake is one of value, and the contract is normally enforceable. the reason for this is that value is variable. Depending on the time, place, and other circumstances, the same item may be worth considerably different amounts.

intoxication

is a condition in which a person's normal capacity to act or think is inhibited by alcohol or some other drug.

The general rule is that minors can enter into any contract that an adult can, except contracts that are prohibited by ________ for _______ (ex: purchase of alcohol)

law, minors

Generally, a threat to exercise a ____ ______ such as the right to sue someone, ordinarily does not constitute _______

legal right, duress

unilateral mistake

made by only one of the parties. In general, it does not give the mistaken party any right to relief from the contract. Normally the contract is enforceable.

A contract entered can be into by an an intoxicated person can be either voidable or valid. If the person was sufficiently intoxicated to lack _____ ________, then the agreement may be voidable even if the intoxication was purely voluntary

mental capacity

Courts look at objective indications of the intoxicated persons condition to determine if he or she possessed or lacked the _______ ______. it is difficult to prove that a persons judgment was so severely impaired that he or she could not comprehend the legal consequences of entering into a contract. therefore, courts rarely permit contracts to be avoided due to _________

mental capacity, intoxication

Undue influence can arise in various types of relationships where one party may have the opportunity to dominate and unfairly influence another party.______ and ________ people, for instance are often under the influence of guardians. If a guardian induces a young or elderly ward to enter into a contract that benefits the guaradian, the guardian may have exerted undue influence

minors, elderly

Voluntary consent may be lacking because of a ________, _________, undue influence, or duress. In other words there is no true "meeting of the minds"

mistake, misrepresentation

in certain circumstances, contract law allows a contract to be avoided on the basis of a mistake. However it is important to distinguish between ________ of _______ and _______ of _______ or _________

mistakes of fact, mistakes of value or quality

Bilateral mistake

mutual misunderstanding concerning a basic assumption on which the contract was made. When both parties are mistaken about the same material fact, the contract can be rescinded by either party. A word or term in the contract may be subject to more than one reasonable interpretation. If the parties to the contract attach materially different meanings to the term, a court may allow the contract to be rescinded because there has been no true "meeting of the minds"

bilateral mistake

or a mutual mistake made by both of the contracting parties.

remedy

relief provided for an innocent part when the other party has breached the contract. they may include monetary damages, rescission and restitution, specific performance, and reformation

In addition to agreement and consideration, for a contract to be deemed valid, the parties to the contact must have contractual capacity

the legal ability to enter into a contractual relationship

disaffirmance

the legal avoidance, or setting aside of a contractual obligation

to establish duress, there must be proof of a _______ to do something that the threatening party has no right to do. generally, for duress to occur, the threatened act must be ______ or _______ and it must render the person incapable of exercising free will.

threat, illegal, wrongful

When parties form a contract, their agreement establishes the value of the object of their _______-for the moment. each party is considered to have assumed the risk that the value will change in the future or prove to be different from what he or she thought. Without this rule, almost any party who did not receive what she or he considered a fair bargain could argue ______

transaction, mistake

If a court has previously determined that a person is mentally incompetant, any contract made by that person is ________-no contract exists. Only a ________ appointed by the court to represent a mentally incompetant person can enter into binding legal obligations on that person's behalf

void, guardian

contracts made by mentally incompetent persons can be _____, ______ or _______

void, voidable, valid

A contract entered into by a minor is ______ at the option of that minor, subject to certain exceptions. to disaffirm, a minor must express his or her intent, through ______ or _______, not to be bound to the contract

voidable, words, conduct

courts generally presume the existence of a contractual capacity, but in some situations, as when a person is _____ or ______ _______, capacity may be lacking or questionable

young, mentally incompetent