Chapter 13 Reality of Consent I Effect of Doctrines Discussed a Voidable contract II Misrepresenatitioan and Fraud person who consent was not real has power to rescind the a Misrepresentation is an assertion that is not in accord with the truth i Fraud Misrepresentaion that is committed knowingly b Requirements For Recission on the Ground of Misrepresenation i An Untrue assertion of fact was made 1 Concealement 2 NonDisclosure active hiding of a fact failure to volunteer nformation ii The fact asserted was material or the assertion was fraudulent significant fact that caused a person to enter 1 Material Fact the contract iii The complaining party entered the contract because of his reliance on the assertion iv The reliance of the complaining party was reasonable v Injury 1 ONLY if he is suing and suffered injury due to fraudulent contract III Mistake a Nature of Mistake i Mistake belief about a fact that is not accord with the truth 1 must relate to the facts as the existed at the time ii Effect of Mistake 1 Mutual Mistake Made by both parties 2 Unilaterail Mistake Made by one party b Requirements for Mutual Mistake i Mistake relates to basic assumption on which the contract was made ii The mistake has a material effect on the agreed upon exchange 1 must show imbalance caused by mistake iii The Party adversely affected by the mistake does not bear the risk of mistake c Requirements for a Unilaterial Msitake i The Nonmistaken Party caused or had caused or had reason to know of the mistake 1 blaten error was made by peron who made mistake ii It would be unconscionable to enforce the contract 1 able to prove that it was a mistake by showing it would be IV Duress unprofitable and would cause losses wrongful coercion that includes a person to enter or modify a contract a Requirements i Contract was induced by an improper threat ii The Victim had no unreasonable alternative but to enter contract b Economic Duress i Using economic pressure to force someone to act V Undue Influence unfair persusasion a Exerted through persusasion versus coercion b Determining Undue Influence i Relationship between parties is one of trust and confidence or one which the person exercising the persuasion dominates the person being persuaded ii The Persuasion is unfair
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