SECTION OPENER / CLOSER: INSERT BOOK COVER ART Mistake, Duress, and Undue Influence Section 6.2

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement What You’ll Learn How to distinguish between unilateral and bilateral mistakes (pp. 133 and 135) How to recognize the types of mistakes that will allow rescission of a contract (p. 134)

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement What You’ll Learn How to recognize the requirements of economic duress (p. 137) How to recognize the requirements of undue influence (p. 138)

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Why It’s Important Recognizing how mistake, duress, and undue influence can affect agreements will help you make better decisions in such situations.

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Legal Terms unilateral mistake (p. 133) bilateral mistake (p. 135) duress (p. 137) economic duress (p. 137) undue influence (p. 138)

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Mistake Unilateral Mistake Bilateral Mistake Section Outline Duress Undue Influence

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement In addition to fraud and misrepresentation, mistake, duress, and undue influence can also create a defective agreement. Genuine Agreement

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Pre-Learning Question How can a mistake disrupt an agreement?

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Mistake People sometimes enter into contracts believing that certain information is true when it is actually not, or that information is not true when it really is.

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Unilateral Mistake A unilateral mistake is an error on the part of one of the parties to the contract. Through words or actions, one party has created reasonable expectations on the part of the other party to the contract.

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Unilateral Mistake Those expectations should not be blocked because one of the parties has made an error, or mistake. A person usually cannot avoid a contract because of such a mistake.

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Unilateral Mistake There are two types of unilateral mistakes. 1.Mistake as to the nature of the agreement. 2.Mistake as to the identity of a party.

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Mistake as to the Nature of the Agreement People who sign an agreement are bound to it, even if they have not read it or are mistaken about what it says.

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Mistake as to the Identity of a Party If you make an offer by letter to one party, but the wrong person mistakenly receives the offer, the mistake may be cause to void the contract.

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Mistake as to the Identity of a Party If you make the same offer face-to- face with a person whose identity you have mistaken, your mistake as to the identity will not prevent a binding contract.

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement 6.2 Remedies for Unilateral Mistakes 1.Mistake as to the nature of the agreement. 2.Mistake as to the identity of a party. 1.Mistake as to the nature of the agreement. 2.Mistake as to the identity of a party. Unilateral Mistake RemedyRemedy 1.Rescission will not be granted. 2.Rescission may be granted. 1.Rescission will not be granted. 2.Rescission may be granted. Type of Mistake

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Bilateral Mistake When both parties to a contract are mistaken about some important fact, this is called a bilateral mistake, or mutual mistake. When this mistake occurs, either party may avoid the contract.

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Bilateral Mistake There are two types of bilateral mistakes. 1.Mistake as to the possibility of performance. 2.Mistake as to the subject matter.

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Mistake as to the Possibility of Performance If both parties enter into a contract believing that the duties described in the agreement can be performed, when in fact, they cannot, either party may avoid the contract.

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement 6.2 Remedies for Bilateral Mistakes 1.Mistake as to possibility of performance. 2.Mistake as to the subject matter. 1.Mistake as to possibility of performance. 2.Mistake as to the subject matter. Bilateral Mistake RemedyRemedy 1.Rescission will be granted. 2.Rescission will be granted. 1.Rescission will be granted. 2.Rescission will be granted. Type of Mistake

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement True or false—Both parties may avoid contracts involving unilateral and bilateral mistakes.

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement ANSWER False

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Pre-Learning Question What do you think duress is?

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Duress Duress is overcoming a person’s will by use of force or threat of force or bodily harm.

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Types of Duress Physical duress is when actual physical violence is used to force a person to enter a contract. Emotional duress is when the threat of physical force is used to force a person to enter a contract.

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Types of Duress Economic duress is when threats to a person’s business or professional reputation are used to force a party to enter a contract.

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Pre-Learning Question What do you think undue influence is?

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Undue Influence Undue influence occurs when a person uses unfair and improper persuasive pressure to force another person to enter into an agreement.

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Undue Influence Circumstances such as ill health, old age, and mental immaturity may put a person in a weaker position.

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement 6.2 Elements of Undue Influence A dependency relationship relationship DescriptionDescription One party in a relationship is dependent on the other party. One party in a relationship is dependent on the other party. Element

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement 6.2 Elements of Undue Influence Unfair or improper pressure pressure DescriptionDescription The independent person uses excessive pressure to force the dependent person to enter a contract. The independent person uses excessive pressure to force the dependent person to enter a contract. Element

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement 6.2 Elements of Undue Influence A beneficial contract DescriptionDescription The contract benefits the independent party at the expense of the dependent party. The contract benefits the independent party at the expense of the dependent party. Element

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Reviewing What You Learned 1. 1.What is the difference between unilateral and bilateral mistakes? Section 6.2 Assessment

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Reviewing What You Learned Unilateral mistake: only one party is mistaken. Bilateral mistake: both parties are mistaken. Section 6.2 Assessment Answer

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Reviewing What You Learned 2. 2.What types of mistake will allow rescission of a contract? Section 6.2 Assessment

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Reviewing What You Learned Mistake as to the identity of a party, mistake as to the possibility of performance, and mistake as to the subject matter. Section 6.2 Assessment Answer

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Reviewing What You Learned 3. 3.What are the requirements of economic duress? Section 6.2 Assessment

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Reviewing What You Learned Economic duress requires threats to a person’s business or income that cause the person to enter a contract without real consent. Section 6.2 Assessment Answer

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Reviewing What You Learned 4. 4.What are the requirements of undue influence? Section 6.2 Assessment

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Reviewing What You Learned Undue influence requires unfair and improper persuasive pressure exercised by one person in a relationship of trust with another person. Section 6.2 Assessment Answer

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Section 6.2 Assessment Critical Thinking Activity Types of Mistakes Why is it important to be able to distinguish between unilateral and bilateral mistakes?

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Section 6.2 Assessment Critical Thinking Activity Answer Types of Mistakes Answers will vary, but should recognize that understanding the differences between unilateral and bilateral mistakes will help you know your rights and remedies in a contract.

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Section 6.2 Assessment Legal Skills in Action Undue Influence Suppose that a close friend has sent you an message saying that she believes her grandfather was tricked into signing over all of his property to his live-in caretaker.

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Section 6.2 Assessment Legal Skills in Action Undue Influence Your friend asks for your advice. Write an reply to explain the elements she would have to prove to demonstrate that her grandfather signed over his property because of undue influence.

Understanding Business and Personal Law Mistake, Duress, and Undue Influence Section 6.2 Genuine Agreement Section 6.2 Assessment Legal Skills in Action Answer Undue Influence To prevail in a claim of undue influence, your friend would need to show that the parties had a relationship of trust, and that the caretaker exercised improper persuasion to take advantage of her grandfather.

SECTION OPENER / CLOSER: INSERT BOOK COVER ART Mistake, Duress, and Undue Influence End of Section 6.2