Chapter 8 Genuine Agreement

Genuine Agreement: “Meeting of the Minds”

I. Mistake– error by one or more parties to a contract which creates a problem and may end it

  1. Unilateral Mistake– a mistake made by one party
    • Mistake as to the Nature of the Agreement- if a party fails thoroughly to understand all terms of a contract, they can’t void the contract
    • Mistake as to the Identity of a party– can be voided
  2. Bilateral Mistake– (mutual mistake) when both parties make an error in an important fact
    • Mistake as to the Possibility of Performance– when the material fact or subject matter can not perform, both parties may avoid
    • Mistake as to the Subject Matter– if the identity if the subject matter is in error, contract can be avoided

II. Fraud– the deliberate deception to secure an unfair gain (Ponzi Scams. Pyramid Scams, Telemarketing Scams)

Recind– to take back your acceptance based on deception

  1. Proof of Fraud
    • False Representation of Fact
      • material fact- an important fact that directly influenced the agreement
      • concealment– falsely representing by deliberately not saying or covering up (non-disclosure)
    • Representation Known to be False
    • False Representation Intended to be Relied Upon- you knew that person was going to rely upon the misrepresentation to purchase the item
    • False Representation Actually Relied Upon- you are buying the item because of the trait, but was not original trait
  2. Resulting Loss– when you lose your money

III. Innocent Misrepresentation:

  • statement of a fact believed to be true but turned out to be false
  • injured party has a right to recind (take back) the acceptance

IV. Duress influencing someone to enter into an agreement by threats or threats of bodily harm

      • economic duress– influencing somebody based on income or job

V. Undue Influence- unfair and improper pursuasive pressure exercised to cause someone to enter a contract or an agreement

  • Avoid the contract
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