Chapter 11

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Chapter 11
2012-05-23 16:36:30
Chapter 11

Chapter 11
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  1. Duress (2 types)
    Wrongful or unlawful threat that overcomes the free will of a party. Invalidates assent.
  2. Physical Compulsion (Duress)
    Makes the agreement void. Involves use of physical threat.
  3. Improper Threats (Duress)
    Makes contract voidable. Involves economic and social coercion.
  4. Undue Influence
    Taking unfair advantage of a person by reason of a dominant position based on a confidential relationship. Makes contract voidable.
  5. When contract is voidable...
    Victim can honor contract OR have it canceled/recinded
  6. Fraud (2 types)
    When someone has been decieved. Invalidates assent.
  7. Fraud in the Execution
    Decdit that causes a person to sign a document that is different then the person believed he/she was signing. Makes agreement VOID. (very rare)
  8. Fraud in the Inducement
    • The contract is VOIDABLE if all of the following are true:
    • - False representation of
    • - Fact, that is
    • - Material, and made with
    • - Scienter (intent to decieve), upon which there is
    • - Justifiable Reliance
    • *Opinions are NOT considered fraud but FACTS are. (exception is if it is a professional opinion, it may be considered statement of fact)
  9. NOT Considered Fraud
    If you have opportunity to read a contract and you don't, it is not fraud even if verbal statements were different.
  10. "Failure to Speak"
    • *Under CL, not required to educate the other party, just cannot lie or misslead.
    • *Today, it is different (by statute, many disclosures must be provided to consumers); there are 3 requirements: (1) reveal hidden defects [something physical inspection would not reveal]; (2) correct prior misstatements; (3) if you have a fiduciary relationship.
  11. Mistake
    An understanding not in accord with the facts.
  12. Mutual Mistake
    Makes the contract voidable by either party.
  13. Unilateral Mistake
    No relief for mistaken party. (Exception: Palpable Unilateral Mistake - when other party knows you're mistaken. *contract is voidable by mistaken party)