stonybrook-chapter14guide - Chapter 14: Mistakes, Fraud,...

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A contract may be unenforceable if the parties have not genuinely assented to its terms. Assent may be lacking because of mistakes, misrepresentation, undue influence, or duress. A party who has not truly assented can choose to avoid the transaction- lack of assent is both a defense to the enforcement of a contract and a ground for recession (cancellation) of a contract. An injured party can also opt to enforce the deal. Mistakes It is important to distinguish between mistakes made in judgment as to value or quality and mistakes made as to facts. Only the latter have legal significance. Mistakes of Fact o Bilateral (Mutual) Mistake of Fact If both parties are mistaken as to a material fact , either party can rescind the contract. This is also true of they attach different meanings to a term subject to more than one reasonable interpretation. o Unilateral Mistake of Fact When one contracting party makes a mistake as to some material fact, he or she is not entitled to relief from the contract. Exceptions are as follows: Other Party’s Knowledge o A contract may not be enforced if the other party to the contract knows, or should have known, that a mistake was made. Mathematical Mistakes o A contract may not be enforceable (or may be reformed) if a significant mistake in addition, subtraction, division, or multiplication was inadvertent and made without gross negligence. Mistakes of Value o When one or both parties make a mistake as to the market value or quality of the object of a contract, either party can enforce the contract. Fraudulent Misrepresentation
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This note was uploaded on 02/24/2011 for the course AEM 3210 taught by Professor Grossman,da during the Fall '07 term at Cornell University (Engineering School).

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stonybrook-chapter14guide - Chapter 14: Mistakes, Fraud,...

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