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CHAPTER 7 Genuineness of Assent

CHAPTER 7 Genuineness of Assent. 7-1 Duress and Undue Influence 7-2 Mistake, Misrepresentation, and Fraud. 7-1 Duress and Undue Influence. GOALS Recognize when genuine assent is not present Identify the two key elements in undue influence. FOCUS. Scenario

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CHAPTER 7 Genuineness of Assent

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  1. CHAPTER 7Genuineness of Assent 7-1 Duress and Undue Influence 7-2 Mistake, Misrepresentation, and Fraud

  2. 7-1 Duress and Undue Influence GOALS • Recognize when genuine assent is not present • Identify the two key elements in undue influence Chapter 7

  3. FOCUS Scenario • The Thompsons were told that if they did not sign a contract to repay a $2,000 loan at 40 percent interest, their son would be in danger of physical harm. Afraid that their son would be hurt, the Thompsons signed the contract. Questions • Is the contract enforceable? • Why or why not? (duress) Chapter 7

  4. List the various forms of legal duress. New Legal terms to know: Void-contract is dead Voidable-injured party can withdraw or terminate. Chapter 7

  5. GENUINE ASSENT AND DURESS • Genuine assent-true & complete agreement: without it, contracts are usually voidable. Act of rescission • Duress • Threats of illegal conduct, act of violence • Threats to report crimes, extortion • Threats to sue-page 126 • Economic threats-one business to another Chapter 7

  6. What are the key elements in undue influence? Relationship Wrongful or unfair persuasion Contract is voidable by injured Chapter 7

  7. UNDUE INFLUENCE AND ASSENT • The relationship- person is in a position of trust, confidence, authority • Unfair persuasion Chapter 7

  8. 7-2 Mistake, Misrepresentation, and Fraud GOALS • Recognize the types of mistakes that can make a contract voidable or void • List the criteria for a statement to be treated as a misrepresentation • Define fraud and describe the remedies for it Chapter 7

  9. FOCUS Scenario • Jane contracts with Mike to purchase one of his two skateboards. Jane thinks she has bought the red one, a premier skateboard. Mike thinks Jane has bought the blue one, his less valuable skateboard. Question • Does a contract exist? Chapter 7

  10. Name the types of mistakes that can make a contract voidable or void. Chapter 7

  11. WHAT ARE THE TYPES OF CONTRACTUAL MISTAKES? • Unilateral mistakes-usually enforceable • Mutual mistakes or bilateral-result is the contract is void Chapter 7

  12. WHAT IS MISREPRESENTATION? • Untrue statement of fact • Active concealment • Silence-read page 129 • Materiality rule-it is a material misrepresentation if it causes a person to contract. • Reasonable reliance - victim had to rely on statement • Result-contract voidable by person to whom misrepresentation is made Chapter 7

  13. What are the three criteria for a statement to be treated as a misrepresentation? Chapter 7

  14. TO BE FRAUD: • The misrepresentation must be intentional or reckless • The misrepresentation or concealment must injure • To be adjudicated to be fraud, all the elements of misrepresentation must be proven plus intent and injury. Chapter 7

  15. What are the remedies available for fraud? Chapter 7

  16. REMEDIES FOR FRAUD • Rescission-voidable by the injured party, must return items in contract • Damages-seek damages for loss by buying the item • Punitive damages-adjudicated by judge as a form of punishment for fraud usually $$$ Chapter 7

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