contract slides for web part 2 10

contract slides for web part 2 10 - Defective Assent Mistake

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1/31/11 Defective Assent Mistake Misrepresentation Concealment Fraud Undue Influence Duress
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1/31/11 Mistake Innocent conduct Three possible outcomes: Contract void Contract voidable Mistake given no effect
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1/31/11 Mistake Mistake of fact Value or quality? Mistake of law Normal rule: not actionable Unilateral mistake v. mutual mistake
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1/31/11 Unilateral Mistake Only one person is mistaken General rule: unilateral mistake has no effect. Two exceptions: Other party knew/should have known of mistake or he caused the mistake Enforcement of contract would be unconscionable. Note Scott v. Mid-Carolina Homes , text at
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1/31/11 Actionable Mutual Mistake Related to a basic assumption about the contract Has a material effect on performance Risk not allocated to party seeking avoidance See Jackson v. Blanchard , Case 17-1
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1/31/11 Misrepresentation False statement of fact Misstatement is material Justifiable reliance by party seeking avoidance The wronged party may seek rescission as a remedy – s/he can avoid the contract
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1/31/11 Concealment or Nondisclosure Part of truth told, but something omitted, creating overall misleading impression Positive action taken to conceal truth [may be non-verbal action] Condition created by seller and hard to discover by prudent buyer Fiduciary relationship with duty to reveal
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1/31/11 Fraud Material misrepresentation of fact Intent to deceive [ scienter ] Justifiable reliance on misrepresentation Proof of injury to recover damages may not be necessary for rescission See Cruse v. Coldwell Banker , Case 17-3 See Vokes v. Arthur Murray [not in
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1/31/11 Undue Influence Must be proof that party was a “victim” Cannot avoid every bad deal – was it a reasonable transaction? Was there a confidential or fiduciary relationship? If yes, there is a presumption of undue influence
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1/31/11 Duress Coercion of a particular victim In extreme cases, contract may be void Traditional forms of duress: Using violence or threatening violence Imprisonment or threats of it Wrongful taking or keeping of property
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1/31/11 Economic Duress Party threatened to withhold goods due under current contract unless victim agrees to further demands Threatened party cannot obtain goods from another source Remedies for breach of contract are not adequate
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1/31/11 Unconscionability Procedural unconscionability One party lacked meaningful choice Directed to the process Substantive unconscionability Contract terms unreasonably favorable to one party M.A. Mortenson Co. v. Timberline Software Corp.
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Statute of Frauds General rule : Oral contracts are enforceable. Exceptions
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This note was uploaded on 01/30/2011 for the course AEM 2300 taught by Professor Lee,d.r. during the Fall '06 term at Cornell University (Engineering School).

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contract slides for web part 2 10 - Defective Assent Mistake

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