1. ES 2.00 UNDERSTAND CONTRACT LAW
Obj Understand the elements and characteristics of a contract
2.01 B Genuine Agreement

2. GENUINE AGREEMENT (ASSENT)
A valid offer has been made by the offeror, and a valid acceptance has been exercised by the offeree
Several causes for genuine agreement to be lacking in a contract
Duress
Undue Influence
Unilateral or Mutual Mistake
Innocent Misrepresentation
Fraudulent Misrepresentation

3. Overcoming a person’s free will by use of force or by threat of force or bodily harm
Threats of Illegal Conduct
Threats to Report Crimes
Threats to Sue
Threats to sue made for purpose unrelated to the suit
Economic Duress
Threats to a person’s business or income
Duress

4. Unfair and improper persuasive pressure within a relationship of trust
Must be able to prove:
Relationship of trust, confidence or authority
Unfair persuasion
Undue Influence

5. Unilateral Mistake An error on the part of one of the parties
Does not affect validity of the contract
Cannot get out of contract
Nature of the Agreement
Signing a contract you don’t understand or have not read
Signing a contract in a language you don’t understand

6. Mutual Mistake (Bilateral Mistake)
Both parties are mistaken about an important fact
Impossibility of Performance
Contract is impossible to perform
Contract is void
Subject Matter
Either party can void contract
Existing Law
Contract is valid
Parties are expected to know the law
Mutual Mistake (Bilateral Mistake)

7. Innocent Misrepresentation
Innocent statement of supposed fact that turns out to be false
Statement must be one of fact
Statement must be material
Statement must be relied upon
Injured party has the right to rescind (take back) the offer
No rights to damages
Innocent Misrepresentation

8. Fraudulent Misrepresentation
Party to a contract deliberately makes an untrue statement of fact
Deliberate: Done with or marked by full consciousness of the nature and effects; intentional
Deception: The fact or state of being deceived
Gain: To secure as profit or reward
In order to prove fraud, you must prove the above 3 definitions
Fraudulent Misrepresentation

9. Proving Fraudulent Misrepresentation
Untrue statement of fact
Must be one of fact, not opinion
Active concealment
Silence – may stay silent about defects except when:
statement is about material facts
True statement is made false by subsequent events
One party knows the other party has made a basic mistaken assumption
Materiality
Statement would cause reasonable person to contract
If one party knows the other party would rely on the statement
If one party knows the statement is false
Proving Fraudulent Misrepresentation

10. Proving Fraudulent Misrepresentation
Reasonable Reliance
One party must reasonable rely on statement
Intentional or reckless
One party deliberately lies or conceals a material fact
One party recklessly makes a false statement of fact, without knowing whether it is true or false
Statement must be intended to induce party to enter into contract
Resulting Loss
Must cause an injury
Proving Fraudulent Misrepresentation