Genuine Agreement

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Chapter 6

• Genuine Agreement

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Fraud

• A deliberate deception to secure an unfair or
  unlawful gain
• May rescind (cancel) the contract or sue for
  damages
• May also collect punitive damages which are a way
  to punish the wrongdoer

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For a successful lawsuit, you must have
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False Representation of Fact

• Material Fact one of importance
• Excludes Sales Puffery
• Concealment not saying something that they
  should say
• Especially important when you are considered
  an expert.

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Representation Known to be False

• The parties must know the fact is not true.
• p.130 Example 1

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False Representation Intended to be Relied Upon

• It must be information or facts that the parties
  can reasonably rely upon.

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False Representation Actually Relied Upon
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Resulting Loss

• Must have a monetary loss.

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Innocent Misrepresentation

• When the person actually believes a fact is true,
  but it is not.
• An injured party may rescind the contract
• p. 132 Example 4

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Mistake
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Unilateral Mistake

• An error on the part of one of the parties to the
  contract
• This is NOT a reason to get out of the contract.
• Two types of Unilateral Mistakes

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Mistake in the Nature of the Agreement

• Both parties are responsible for contract when
  signed, even if they have not read it.

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Mistake in the Identity of a Party

• This MAY be cause for voiding a contract.
• This is not the case in a face-to-face meeting.
• p. 134 Example 6

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Bilateral Mistake

• Both parties are mistaken about some important
  fact
• Possibility of Performance
• Both parties believe it can be performed when it
  cannot.
• Subject Matter
• When both parties are mistaken as to the identity
  of the subject matter

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Duress

• Use of force or by threat of force or bodily harm
  
• These are either void or voidable
• Physical force void
• Threat of force voidable
• Economic Duress threats to a persons business
  or income

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Undue Influence

• Unfair and improper persuasive pressure exercised
  by one person in a relationship of trust with
  another person.
• i.e. poor health, old age, mental immaturity