airline, buses, trains, ferries, etc. minors cannot get their money back after embarking, but they can cancel beforehand without a penalty (usually 16 or 17) ■ State for marriage by minors- a minor cannot disaffirm a marriage ● Mentally Impaired and Intoxicated Persons ○ Mentally Impaired Persons ■ Include those who are brain damaged, severely senile, or mentally ill ■ If individual (at the time of the contract) is incapable of understanding the nature and effect of the agreement, then the contract fails for want of a mutually agreed upon decision, contract void ○ Intoxicated persons ■ Success of disaffirming a contract because of intoxication depends on the degree of intoxication ■ Only void if person can prove he was so intoxicated as to not be able to understand the nature and effect of the agreement LACK OF CONSENT ● Fraud ○ Intentionally tricking people into entering into a contract ○ Elements ■ 1. Misrepresentation- D made a misrepresentation of a material fact (does NOT include predictions or opinion, but does include warranties) ■ 2. Intent to Deceive - The statement was made with the intent to deceive ● D knew or should have known the statement was false ● Still fraud if D doesn’t know truth but makes statement “with a reckless disregard for the truth” ■ 3. Reliance- That P reasonably relied on the misrepresentation
● Does not exist if P knew statements were false ■ 4. Injury- P suffered an injury as a result ○ If you are silent on an issue, you are not guilty of fraud because the buyer is responsible for themselves ■ Exceptions to silence rule ● 1. Hidden defect on the sale of a home ● 2. Fiduciary relationship exists- like when a person is buying a stock from a shareholder, the person has to disclose the special facts they have that would affect the stock value ● 3. Superior knowledge- when one party has superior knowledge to the subject matter of the contract, they have a duty to pass the knowledge to the other party ○ Remedies for Fraud ■ One fraud is established, victim always has the right to rescission ■ If it is rescinded, the victim has to return consideration ■ Or the buyer can keep the consideration (affirm the contract) and bring suit for damages (difference between actual value and what buyer received) ● Mistake ○ Mutual mistake ■ Principle that a contract can be set aside if there is a mutual mistake as to the existence, identity, or character of the subject matter of the contract ○ Unilateral Mistake ■ Where only one party to a contract is mistaken about a material fact ■ Rescission is normally not allowed unless the mistake was apparent to the other party ● Ex. seller knows buyer thinks a painting is a Picasso but it isn’t ● Duress ○ 1. Any wrongful act that compels a transaction while one party is facing any kind of threat oc cannot exercise free will ■ Person has to be induced by a genuine fear (gunpoint) ■ Or if a person threatens to harm another (kidnapping) ■ The threat of criminal suit is duress ■ Courts are beginning to consider economic duress ●
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- Spring '08