1. Law for Business and Personal Use © Thomson South-Western CHAPTER 7 Genuineness of Assent 7-1Duress and Undue Influence 7-2Mistake, Misrepresentation, and Fraud

2. Law for Business and Personal Use © Thomson South-Western Chapter 7 Slide 2 7-1 7-1Duress and Undue Influence GOALS Recognize when genuine assent is not present Identify the two key elements in undue influence

3. Law for Business and Personal Use © Thomson South-Western Chapter 7 Slide 3 FOCUS Scenario The Thompsons were told that if they did not sign a contract to repay a $2,000 loan at 40 percent interest, their son would be in danger of physical harm. Afraid that their son would be hurt, the Thompsons signed the contract. Questions Is the contract enforceable? Why or why not?

4. Law for Business and Personal Use © Thomson South-Western Chapter 7 Slide 4 GENUINE ASSENT AND DURESS Genuine assent Duress Threats of illegal conduct Threats to report crimes Threats to sue Economic threats

5. Law for Business and Personal Use © Thomson South-Western Chapter 7 Slide 5 List the various forms of legal duress.

6. Law for Business and Personal Use © Thomson South-Western Chapter 7 Slide 6 UNDUE INFLUENCE AND ASSENT The relationship Unfair persuasion

7. Law for Business and Personal Use © Thomson South-Western Chapter 7 Slide 7 What are the key elements in undue influence?

8. Law for Business and Personal Use © Thomson South-Western Chapter 7 Slide 8 7-2 7-2Mistake, Misrepresentation, and Fraud GOALS Recognize the types of mistakes that can make a contract voidable or void List the criteria for a statement to be treated as a misrepresentation Define fraud and describe the remedies for it

9. Law for Business and Personal Use © Thomson South-Western Chapter 7 Slide 9 FOCUS Scenario Jane contracts with Mike to purchase one of his two skateboards. Jane thinks she has bought the red one, a premier skateboard. Mike thinks Jane has bought the blue one, his less valuable skateboard. Question Does a contract exist?

10. Law for Business and Personal Use © Thomson South-Western Chapter 7 Slide 10 WHAT ARE THE TYPES OF CONTRACTUAL MISTAKES? Unilateral mistakes Mutual mistakes

11. Law for Business and Personal Use © Thomson South-Western Chapter 7 Slide 11 Name the types of mistakes that can make a contract voidable or void.

12. Law for Business and Personal Use © Thomson South-Western Chapter 7 Slide 12 WHAT IS MISREPRESENTATION? Untrue statement of fact Active concealment Silence Materiality Reasonable reliance

13. Law for Business and Personal Use © Thomson South-Western Chapter 7 Slide 13 What are the three criteria for a statement to be treated as a misrepresentation?

14. Law for Business and Personal Use © Thomson South-Western Chapter 7 Slide 14 FRAUD The misrepresentation must be intentional or reckless The misrepresentation or concealment must injure

15. Law for Business and Personal Use © Thomson South-Western Chapter 7 Slide 15 REMEDIES FOR FRAUD Rescission Damages Punitive damages

16. Law for Business and Personal Use © Thomson South-Western Chapter 7 Slide 16 What are the remedies available for fraud?