If all elements of fraud are present, except that the person making the false statement honestly/reasonably believed the statement to be trueoP still can rescind contract, but no damages are awardedoNo injury required Mistake oNo remedies for bad judgement oIf it was a mutual mistake by both parties of a fact, then either can rescind oIf it was a unilateral mistake, but other party knew or should have known that party can rescind If it was only parties mistake no rescission unless for following exceptionsMistake was one of negligence (misreading of plans, mistake in math)Rescission would cause no injury to non-mistaken party other than loss or false bargain Holding the mistake party to his bid would be unconscionable oMutual mistakes on value of item are not rescindable Duress oWhen a party is forced to enter into a contractoIf a person enters a contract because failure to do so will incur the wrath of a third party such as employer or spouse, no relief is grantedoBut if degree of force robs person of free will, duress exists, and contract can berescinded oNeed fear to prove duressGenuine fear that injurious, unlawful act will happen by not acting accordingly to other party’s terms Threat of criminal suit regardless of guiltException: threat of civil suit doesn’t countUndue Influence oIf older person can showThat he was induced to enter particular contract by virtue of the dominate party’s power and influence, rather than using his own volition 50
The dominant party used this power to take advantage of him, undue influence is established; no freewilloRescission allowedHome Solicitation StatutesoThere is a 3-day period where you can cancel contract for any reason if:The contract is over $25 Sale was initiated by seller Contract was completed at a place other than the sellers place of businessContracts made by minors oA person without full capacity can void a contract made only if party without capacity makes an objectionoMinor can object within a reasonable amount of time after reaching 18 or time of contractoDisaffirmance = minor, bfore he comes an adult, can say no intention of being bound or doesn’t perform contract can void it oWhen contract is performed = minor can still disaffirm contract but would have to pay for any damages in some states but others you pay nothing Exceptions: firms that provide necessities (medicine, food) can deal with minors and not worry about rescission Exculaptory ClausesoCan't hold me liable for being negligent oInvolve recreational activites that are completely optional on the part of participant and don’t affect public interest oDoesn’t bar negligence claim where using party provides essential to everyday life (apartments, hospital, legal services, utilities) unless it is:Written clearlyConspicuous Unconscionable ContractsoThe freedom to contract is abused so that the terms of a particular contract are so extremely unfair to one of the parties in light of business practices that they “shock one’s conscience” o
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