1. Genuine Assent Chapter 7

2. Genuine Assent ► True and complete intent to enter into a contract Without it, contracts are typically voidable

3. Voidable – if the injured party desires, they can cancel their obligation and get back what they have already put in

4. ► Rescission – when the injured/forced party cancels their obligation of a contract ► Ratification – suggesting you intend to be bound by contract

5. Duress ► Occurs when one party uses improper threat or act to obtain a contract ► Creates a VOIDABLE contract

6. Types of Duress 1. Threats of illegal conduct 2. Threats to report crimes 3. Threats to sue 4. Economic threats

7. Undue Influence ► Occurs when one party is in a position of trust and wrongfully dominates and deceives the other party ► VOIDABLE by the victim

8. Mistake, Misrepresentation & Fraud

9. Unilateral Mistake ► Occurs when only one party holds an incorrect belief about the facts of a contract

10. Mutual (bilateral) Mistake ► Both parties have an incorrect belief about an important fact of a contract ► Also known as “Mutual Mistake” ► Contract is VOID

11. Material Facts are the important facts that influence a persons decision to enter into a contract

12. Two types of Misrepresentation ► Innocent Misrepresentation (involuntary) ► Fraudulent Misrepresentation (voluntary)

13. Requirements of Misrepresentation 1. Untrue statement is one of fact or active concealment 2. Statement is material to the transaction 3. Victim reasonably relied on statement

14. Fraud ► Based on misrepresentation ► Must be proven to show…  All elements of misrepresentation  Intent  Injury

15. Remedies for Fraud ► Rescission (cancel the contract) ► Damages  Recovery from loss ► Punitive Damages  Forms of punishment (above and beyond recovery from loss)