NOTES-CONTRACT CHAPTER 5

NOTES-CONTRACT CHAPTER 5 - CHAPTER 5: REGULATING THE...

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CHAPTER 5: REGULATING THE BARGAINING PROCESS C. F RAUD C HAPTER 5, § C.1 M ISREPRESENTATION S COTT RAUS PP . 409-426 R STMT 2 D C ONTRACTS §§ 160 161 162, 164, 167-69 C HAPTER 5, § C.2 D UTY TO R EAD S COTT RAUS PP . 426-440 R STMT 2 D C ONTRACTS § 211(2) C HAPTER 5, § C.3 D ISCLOSURE S COTT RAUS PP . 440-456 R STMT 2 D C ONTRACTS § 161 D. C APACITY C HAPTER 5, § D I NFANCY ENTAL I LLNESS S COTT RAUS PP . 456-480 R STMT 2 D C ONTRACTS §§ 14, 15 E. P UBLIC P OLICY C HAPTER 5, § E I LLEGALITY MMORALITY S COTT RAUS PP . 480-501 R STMT 2 D C ONTRACTS § 178 F. U NCONSCIONABILITY C HAPTER 5, § F P ROCEDURAL UBSTANTIVE S COTT RAUS PP . 501-515 R STMT 2 D C ONTRACTS § 208; UCC § 2-302 O MIT 5.G S TATUTE OF F RAUDS C. Fraud § C.1 Misrepresentation Rstmt 2d §§ 162, 164, 167-69 §162 – When a misrepresentation is fraudulent or material: 1) Fraudulent : if the maker intends his assertion to induce party to manifest his assent and the maker + reliance==conceal a) knows or believes that the assertion in not in accord with the facts, or know false b) does not have the confidence that he states or implies in the truth of the assertion, or not know false not know true c) knows that he does not have the basis that he states or implies for the assertion-basic remedy is rescission not know false not know true 2) Material : if it would be likely to induce a reasonable person to manifest his assent, or if the maker knows that it would be likely to induce the recipient to do so. Not know false, think true ??? + reasonable reliance==conceal Reliance §164 – When a misrepresentation makes a contract
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voidable 1) if a party’s manifestation of assent is induced either by a fraudulent or material misrepresentation by the other party upon which the recipient is justified in relying Smith: must be actual reliance. However, defense that the fool was not justified in relying on a fraudulent misrepresentation won’t fly. ( result of both F and M) 2) if a party’s manifestation of assent is induced either by a fraudulent or material misrepresentation by one who is not a party to the transaction upon which the recipient is justified in relying UNLESS the other party to the transaction in good faith and without reason to know of the misrepresentation either (gives value or relies materially on the transaction.) not know this influence 167—reliance -Opinions and puffery §168, are ok. But opinions can be assertions of underlying facts. Except: 169: trust, special skill. Special reason particularly susceptible to Speiss v. Brandt Did sellers misrepresent buyers ability to pay purchase price out of profit? Yes, so rescind. But dissenting ? question on reasonable reliance. What if buyers had never asked about whether purchase price could
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This note was uploaded on 08/27/2008 for the course LAW A501 taught by Professor Winn during the Spring '08 term at University of Washington.

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NOTES-CONTRACT CHAPTER 5 - CHAPTER 5: REGULATING THE...

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