1. CHAPTER 8 TEST REVIEW
Genuine Assent

2. 6 PARTS OF A VALID CONTRACT
Offer and Acceptance
Genuine Assent
Consideration
Capacity
Legality
Writing

3. GENUINE ASSENT Entering a contract under your “Own Free Will”
NOT being forced (Duress)
NOT being misled (Misrep or Fraud)
NOT holding an incorrect belief about what you are entering into (Mistake)

4. GENUINE ASSENT
Also known as Genuine Agreement and Mutual Assent

5. What if there is no Genuine Assent?
Contract is Voidable
Only the injured party may end the contract agreement

6. Ratification Showing Intent to be bound by a contract
Best way to ratify is a signature
Can ratify through an option (Payment)

7. Rescission
Backing out of a transaction by asking for a return of what you gave in exchange for what you received
Must occur “PRIOR” to Ratification
Only damage available in a case of Misrepresentation

8. Duress Using an improper threat or act to obtain an agreement TYPES:
Illegal conduct
Threaten to report a crime
Threaten to sue
Economic threats

9. Undue Influence Type of duress 2 Elements to prove: Unfair Persuasion
Using a relationship with a person

10. MISTAKES
Unilateral- one side holds an incorrect belief about the Subject matter of the contract (Voidable)
Bilateral- (Also known as Mutual) When both sides hold incorrect beliefs about the subject matter of a contract (Void)

11. 2 Types of Unilateral Mistakes
Recognized Unilateral Mistake: Mistake is major (Big) and 1 side knows, but allows the other side to think everything is as agreed (Can get recession) Induced Unilateral Mistake: One side “encourages” or induces the other side to make a mistake, the contract is immediately “Voidable”

12. Material Facts Something important in a contract
Has to do with the main subject matter

13. 2 types of Mutual Mistakes
Mistake of the Subject Matter- Both sides hold incorrect beliefs about what they are agreeing to in a contract (Void) Mistake of the Law- Both sides agree to something that turns out to against the law (May be void and in some states, the agreement is still valid)

14. Misrepresentation Untrue Statement of Fact “Told” to a person
Material (Important) to the person making the decision
Relied upon (The person misled relied upon it to make their decision to enter the contract)

15. Fraud
“First” must prove 3 elements of Misrep (Untrue statement, material and relied upon)
“Then” prove:
Intent to deceive
Injury

16. Active Concealment
Intentionally trying to “hide” something from one side
Ex) Covering up a wall with a hole in it to make a person think it’s not damaged

17. Silence Seller may remain silent unless one of 3 things happens:
When a material fact omits information
When a true statement is made false
When the seller knows the other party has made a mistaken conclusion

18. Remedies for Misrep and Fraud
Misrepresentation- ONLY rescission
Fraud- Rescission, compensatory damages and punitive damages