BA Exam 3 Study - Chapter 14 Genuineness of Assent Contract may be unenforceable Mistake Misrepresentation Undue Influence Duress 1 Mistake of Fact

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Chapter 14: Genuineness of Assent Contract may be unenforceable: Mistake, Misrepresentation, Undue Influence, Duress 1.) Mistake of Fact: Only a Mistake of Fact allows a contract to be canceled. -Bilateral (Mutual) Mistakes can be rescinded by either party. -Unilateral Mistakes cannot be canceled unless: If other party to the contract knows or should have known that a mistake of fact was made. If mistake was due to mathematical mistake in addition, summation, subtraction, division, or multiplication & was made inadvertently & without gross negligence. Mistakes of Value: enforceable by either party. Expt: bc of a mistake of material fact. 2.) Fraudulent Misprepresentation: Contract Voidable by Innocent Party. Elements: -Misrepresentation of Material Fact: express or implied. Concealment; Misrepresentation of future facts & statements of opinion are not fraud, unless person professes to be an expert; Misrepresentation of Law is not fraud, unless person has greater knowledge of the law; Silence is not fraud, unless serious problem or defect known or asked & person lied. -Intent to Deceive: Scienter is an Intent to Deceive. Gross negligence is considered intent. (knowledge that fact is not as stated, reckless statement w/ disregard of the truth, implies that statement is based on personal knowledge or investigation) - Reliance on Misrepresentation: Deceived party must have Justifiable Reliance. Depends on the knowledge & experience of the party relying -Injury to the Innocent Party: No proof of injury is required when the action is to rescind contract. Proof of injury is universally required to recover damages. 3.) Nonfraudulent Misrepresentation -Innocent Misrep. -Negligent Misrep. (= to Scienter; treated as fraud. misrep, even though wasn’t purposeful.) 4.) Undue Influence: Contract is Voidable. Presumption of Undue Influence. (Confidential or Fiduciary Relationship, Relationship of dependence, Influence or Persuasion, Weak party talked into doing something not beneficial to him or herself) 5.) Duress Forcing a party to enter into a contract under fear or threat makes the contract voidable. Threatened act must be wrongful or illegal. Improper Threat: to exercise legal rights (criminal or civil suit), Economic or physical. 6.) Adhesion Contracts & Unconscionability Standard-Form (Adhesion) Contracts. Preprinted contract in which the adhering party has no opp. to neg. the terms of the contract, Take-it-or- leave-it” adhesion contracts. Unconscionability:
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This test prep was uploaded on 03/29/2008 for the course B A 241 taught by Professor Hippo,charlesway during the Fall '08 term at Pennsylvania State University, University Park.

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BA Exam 3 Study - Chapter 14 Genuineness of Assent Contract may be unenforceable Mistake Misrepresentation Undue Influence Duress 1 Mistake of Fact

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