Bài giảng Business Law (13th edition) - Chapter 13: Reality of Consent

ContractsIntroduction to ContractsThe Agreement: OfferThe Agreement: AcceptanceConsiderationReality of Consent3McGraw-Hill/Irwin Business Law, 13/e© 2007 The McGraw-Hill Companies, Inc. All rights reserved.ContractsCapacity to ContractIllegalityWritingRights of Third PartiesPerformance & Remedies3McGraw-Hill/Irwin Business Law, 13/e© 2007 The McGraw-Hill Companies, Inc. All rights reserved.Reality of ConsentPAETRHC13“Necessity never made a good bargain.”Benjamin Franklin, 1735Learning ObjectivesFive doctrines that permit people to avoid their contracts because of the absence of real consent:MisrepresentationFraudMistakeDuress, and Undue influence13 - *Contracts induced by mistake, fraud, misrepresentation, duress, or undue influence are generally considered to be voidablePerson claiming non-consent has power to rescind (cancel) the contractPerson claiming non-consent must not act in a manner to ratify (affirm) the contractEffect of Doctrines13 - *A misrepresentation is a false statement and may be negligent (innocent) or fraudulent (knowledge of falsity and intent to deceive) Elements:Defendant made an untrue assertion of factFact asserted was material or was fraudulentComplaining party relied on the assertionReliance of complainant was reasonableFifth element for fraud: injuryMisrepresentation or Fraud?13 - *Remedies13 - *A mistake is a belief about a fact that is not in accord with the truthA unilateral mistake will not render a contract unenforceable unless unequal bargaining position existedDuress is wrongful threat or act that coerces a person to enter or modify contractPhysical, emotional, or economic harmMistake & Duress13 - *Undue influence involves wrongful pressure exerted on a person during the bargaining processPressure exerted through persuasion rather than coercionUndue Influence13 - *Test Your KnowledgeTrue=A, False = BA contract signed under duress or undue influence is simply void.A misrepresentation may be negligent (innocent) or fraudulent. Mutual mistakes may be remedied by reformationDuress and undue influence have the same meaning13 - *Test Your KnowledgeMultiple ChoiceElements of innocent misrepresentation: (a) False assertion(b) Knowingly made to induce a person to enter a contract(c) Reasonable reliance on the assertion by complainant(d) All of the above(e) Both (a) and (c), but not (b)13 - *Test Your KnowledgeMultiple ChoiceA unilateral mistake will not render a contract void unless: (a) Substantial difference between contract and market price(b) Fundamental error occurred(c) An unequal bargaining position existed13 - *Thought QuestionYour landlord tells you that you will be evicted from your apartment or your rent must increase by $75 per month because your neighbors complain about your dog. If you agree to the increase, would the contract be void or voidable under the theory of duress? 13 - *