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Chapter 8

Chapter 8. Genuine Agreement. Goals: *Define genuine agreement and rescission *Identify when duress occurs *Describe how someone may exercise undue influence. 8.1 Duress and Undue Influence. Goals: *Describe the kinds of mistakes that can make a contract void or voidable

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Chapter 8

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  1. Chapter 8 Genuine Agreement

  2. Goals: • *Define genuine agreement and rescission • *Identify when duress occurs • *Describe how someone may exercise undue influence 8.1 Duress and Undue Influence

  3. Goals: • *Describe the kinds of mistakes that can make a contract void or voidable • *Determine when misrepresentation has occurred • *Identify when fraud has occurred • *Discuss the remedies for mistake, misrepresentation, and fraud 8.2 Mistake, Misrepresentation, and Fraud

  4. 1. Offer and Acceptance – Serious, definite offer to contract. The terms must be accepted by the party to who it was communicated. • 2. Genuine Assent – Offer and acceptance must not be based on one party’s deceiving another, on an important mistake, or on the use of unfair pressure exerted to obtain the offer or acceptance. • 3. Legality – What the parties agree to must be legal. Can’t contract to commit a crime or tort. • 4. Consideration – Agreement must involve both sides receiving something of legal value as a result of the transaction. • 5. Capacity – Parties must be able to contract for themselves rather than being forced to use parents or legal representatives. • 6. Writing – Some agreements must be placed in writing to be fully enforceable in court. 6 major requirements to be a contract:

  5. Contracts must be voluntary. Cannot use: • *Fraud -- All the elements of misrepresentation plus intent and injury. • *Misrepresentation – 1. The untrue statement is one of fact or there is active concealment, and 2. The statement is material to the transaction or is fraudulent, and 3. The victim reasonably relied on the statement. • Example: In the sale of a car, the seller might say it has 70,000 miles on it when in fact it has 150,000 miles. If the seller didn’t know the true mileage because a prior owner replaced the odometer, it’s a misrepresentation. • *Undue Influence (one party to the contract is in a position of trust and wrongfully dominates the other party) - Example: elderly person who is dependent on one child for daily care, may sell her home to that child for half its value. • *Duress (threat or act) • *Mistake -- One or both parties have an incorrect belief about an important fact. #2 – Genuine Assent

  6. The absence of genuine agreement will make what appears to be a contract voidable. This means the injured party can rescind. Rescission is backing out of the transaction by asking for the return of what you gave in the transaction, and offering to give back what you have received.

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