LAW_CHAPTER_14 - CHAPTER 14 GENUINENESS OF ASSENT Genuineness of Assent voluntary consent Can be used as a defense to the contract's enforceability

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CHAPTER 14: GENUINENESS OF ASSENT Genuineness of Assent: voluntary consent Can be used as a defense to the contract’s enforceability MISTAKES OF FACT Bilateral Mutual mistake Made by both of the contracting parties Occurs when both of the parties are mistaken as to some  material fact A fact that is important to the subject matter of the contract Contract can be rescinded by either party Ex) Keeley buys painting from Umberto’s art gallery Both K and U believe that the painting is Van Gogh Later, K discovers that the painting is a very clever fake Since neither K nor U were aware of this material fact when they made  their deal: K can rescind the contract and recover the purchase price of the  painting “Meeting of the Minds” A word or term in a contract may be subject to more than one reasonable  interpretation If the parties to the contract attach materially different meanings to the term— their mutual mistake of fact may allow the contract to be rescinded Unilateral Made by only one of the parties Does not afford the mistaken party any right to relief from the contract There are 2 exceptions to this general rule [1] if the other party to the contract knows or should have known that a  mistake of fact was made, the contract may not be enforceable [2] unilateral mistake of fact was due to a mathematical mistake and was  made inadvertently and without gross (extreme) negligence Both situations: mistake must still involve some material fact MISTAKES OF VALUE Mistake concerns the future market value or quality of the object of the contract Either party can normally enforce the contract Can be bilateral or unilateral
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Either way, they do not serve the basis for avoiding a contract Guitar Example     Chi buys violin from Bev for $250 Violin is old—but neither party believes that it is extremely valuable Antique dealer informs the parties later that the violin is rare and worth  thousands of dollars Mutual mistake has been made Mistake is not of  fact Does not warrant contract rescission Similarly—a unilateral mistake of value will not serve as the basis for  avoiding a contract either The reason that mistakes of value/quality have no legal significance: Value is variable Depending on the time, place, and other circumstances The same item may be worth considerably different amounts When parties form a contract their agreement establishes the value of the object of  their transaction—for the moment. Each party is considered to have assumed the risk that the value will change in the 
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This note was uploaded on 04/08/2008 for the course LAW 202 taught by Professor Nation during the Spring '07 term at Lehigh University .

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LAW_CHAPTER_14 - CHAPTER 14 GENUINENESS OF ASSENT Genuineness of Assent voluntary consent Can be used as a defense to the contract's enforceability

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