Law Ch 9

Duress

A means of destroying another's free will by one party obtaining consent to a contract by wrongfully threatening the other person or family with harm

Mark a civil engineer entered into a contract with David. As per contract, Mark agreed to design and build a house for David for a specified fee. Mark provided David with an estimation of total cost and the contract was mutually agreed upon. However, during construction when Mark increased the price due to a miscalculation on his part, David refused to pay the amount. This is an example of _____________.

A unilateral mistake

Passive Fraud Example

And attorney fails to tell his client of an offer to settle a case.

Mary contracts to sell Rachel her violin for $10,000 based on an appraisal of the instrument. Their contract provides that even if the appraisal is later found to be mistaken, the sale price price will not be altered. One month after the sale, Rachel learns that the violin is only worth $5000. What will happen?

Because the contract specified what would happen in the case of a mistake, the sale price will not be altered.

What is it called when one party wrongfully threatens to injure another person financially in order to get agreement to a contract?

Economic duress

Passive Fraud

Failure to disclose information when there is duty to do so

True or False - A contract is void if parties are mutually mistaken about their expectations.

False

True or False - As a general rule a unilateral mistake at the time of contracting has an effect on the validity of the contract.

False

True or False - Fraud in the execution occurs when a defrauded party intends to sign a contract as a result of false statements made by the promisor.

False

Undue Influence

Refers to a person in a special relationship causing another's action contrary to free will

Fraud in the Execution

The defrauded party did not intend to sign a contract when nature of writing could not be understood.

What happens regarding parties who make mutual mistakes of law?

The parties are expected to have knowledge of the law when making contracts, therefore the contract is enforceable.

True or False - A false statement made in the belief it is true is innocent misrepresentation.

True

True or False - If a contract is voidable due to a mistake such as fraud in the inducement, duress, or undue influence, a persons might elect to rescind the contract.

True

True or False - Ordinarily for a mistake to invalidate a contract, the mistake must be a mutual one about material fact.

True

True or False - If a unilateral mistake regarding price results from a misunderstanding of an oral quotation of the price the contract is invalid.

False

True or False - When one party wrongfully threatens another person physically in order to get agreement to a contract, economic duress occurs

False

True or False - Mistakes such as duress or undue influence render contracts void.

False (they can be rescinded though)