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Genuineness of Assent Chapter 7

Genuineness of Assent Chapter 7. Genuine Assent. Genuine Assent – true and complete agreement. Voidable – without genuine assent the contract is voidable. Rescission. Rescission – backing out of the transaction by asking for return what you gave and offering to give back what you received.

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Genuineness of Assent Chapter 7

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  1. Genuineness of AssentChapter 7

  2. Genuine Assent • Genuine Assent – true and complete agreement. • Voidable – without genuine assent the contract is voidable.

  3. Rescission • Rescission – backing out of the transaction by asking for return what you gave and offering to give back what you received.

  4. Ratification • Ratification – conduct suggesting you intend to be bound by the contract.

  5. Duress • Duress – occurs when one party uses and improper threat or act to obtain an expression of agreement.

  6. Threat to Report Crimes • If you use the threat to report a crime to get someone to agree to a contract this is still duress. • FYI – the above act might also be considered extortion.

  7. Threat to Sue • If you threaten to sue someone for an unrelated event to force them into a contract this is duress as well.

  8. Economic Threats • If you threaten someone economically in regards to an existing contract agreement, this modification to the contract is duress.

  9. Undue Influence • Undue Influence – occurs when one party to the contract is in a position of trust and wrongfully dominates the other party. • When Undue Influence happens the courts look at: • The Relationship • Unfair Persuasion

  10. The Relationship • A relationship of trust, confidence, and authority must exist between both parties in the contract.

  11. Unfair Persuasion • Evidence of unfair persuasion is usually found in the terms of the contract itself.

  12. Unilateral Mistake • Unilateral Mistake – occurs when only one party holds an incorrect believe about the facts related to the contract. • Generally a unilateral mistake does not affect the validity of the contract. • “Experience is the name everyone gives to their mistakes.”Oscar Wilde

  13. Mutual Mistake • Also known as a Bilateral Mistake • Mutual Mistake – is when both parties have a incorrect belief about an important fact (called Material Facts) in the contract.

  14. Void Contracts Due to a Mutual Mistake • A mutual mistake can make a contract void (without legal effect) • “A man who has committed a mistake and doesn't correct it is committing another mistake.” Confucius • HOWEVER: Mutual mistakes made about applicable laws do not void a contract. • All persons are presumed to know the law.

  15. Innocent Misrepresentation • When you make a mistake about a material fact in a contract without knowing it.

  16. Fraudulent Misrepresentation • When you make a mistake about a material fact in a contract and are aware that you are doing so. • Statements are treated as misrepresentations by the law only if: • The untrue statement is one of fact, or there is active concealment. • The statement is material to the transaction. • The victim reasonably relied on the statement.

  17. Untrue Statement of Fact • The misrepresentation of statement must be one of fact rather than opinion. • When an expert expresses and opinion the law will treat it as a fact.

  18. Active Concealment • Active concealment – is the substitute of a false statement of fact.

  19. Silence • In most cases the seller may remain silent about defects. • HOWEVER: there are three situations where the seller must disclose defects. • Where a statement of material fact omits important information. • When a true statement is made false by subsequent events. • When one party knows the other party has made a basic mistaken assumption.

  20. Materiality • The untrue statement must be determined to be material (important and relevant). • A statement is material if: • It would cause a reasonable person to contract. • The defendant knew the plaintiff would rely on the statement. • If the defendant knew the statement was false.

  21. Reasonable Reliance • Even if a statement is material, there is no representation unless the victim reasonably relied on it.

  22. Fraud • Fraud – all of the elements of misrepresentation must be proven and the additional elements of: intent and injury.

  23. The Misrepresentation Must be Intentional or Reckless • The misrepresentation must be intended to induce the victim to contract.

  24. The Misrepresentation or Concealment Must Injure. • There must be proof of injury.

  25. Remedies for Fraud • Rescission – the victim may back out of the contract. • Anything you received must be returned. • Damages – the defrauded party may choose to ratify the agreement then seek damages for loss created by the fraud.

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