law_notes - 11/8 GENUINENESS OF ASSENT Defects in Contract...

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11/8 GENUINENESS OF ASSENT Defects in Contract Formation Process [1] Mistake Must be a mutual mistake of fact, not value Both parties mistaken [2] Fraud Inducement In-fact or real fraud Less common, prove that party deceived didn’t know Had no reasonable opportunity to know Was tricked into signing [3] Duress Physical duress Economic duress Must have caused it Wrongful/illegal Profited from it [4] Undue Influence Ex) parents rely on child to enter into contracts—have to prove that child benefited from it MISTAKE HYPOS (1) Both parties believe the same incorrect fact Guitar Buy guitar and find original copy of declaration of independence hidden inside of it = mistake! Mutual mistake b/c both parties thought they were buying/selling a guitar (not a hidden document) There is the defense of mistake! (2) One party is mistaken, the other party is correct Printer Order business cards and write (10XX) Buyer really wanted 1,000 printer made 10,000,000 Unilateral mistake: argued that in the trade X = 000 So 10XX = 10,000,000 Court agreed that printer is correct There is no defense of mistake! (3) Both parties believe something different, but both parties beliefs are reasonable Coin Collection Swiss Collection and Rarity Collection Used interpreter and agreed on “Swiss Coins” (2 languages) Buyer thinks he bought ALL the Swiss coins, but he just bought the collection There is the defense of mistake!
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(4) Both parties know they don’t know an important fact, but choose to contract anyway Violin Violin on sale for $12 You know that its more expensive, bargain down and pay $10 Ends up in the newspaper Can the other guy who sold it allege mistake? NO Mistake was unilateral You knew that the seller doesn’t know how much the violin is really worth Safe Knew the combination for the front but there was no key for inside compartment Sell the safe in an auction and announce that its unknown what is in the hidden compartment Someone bought the safe, hired a locksmith and found $12,000 cash Should report anything more than $10,000 Mutual mistake? Court said NO! Category 4 parties allocated risk They knew there could be something in there, they sold it anyway 11/10 FRUAD IN THE INDUCEMENT [1] Misrepresentation [2] Fact Not opinion Exception: Vokes [3] Material [4] Scienter “guilty mind” knew it was fake or lacked a reasonable basis to believe its true Innocent misrepresentation future, NOT on the exam [5] Justifiable Reliance Can’t rely on something you know (or should know) is false Obligation to Speak Generally NONE Exception: Statutory obligation Special relationship Can treat the opinion of an expert as a fact—Vokes case Ex) My Cousin Vinny (tire tracks) 11/15 THE STATUTE OF FRAUDS
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law_notes - 11/8 GENUINENESS OF ASSENT Defects in Contract...

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