Ch. 6 Genuine Agreement

1. Ch. 6 Genuine Agreement By Ladavia Cullum

2. Vocabulary Section 6.1 Fraud- a deliberate deception intended to secure an unfair or unlawful gain. Rescind- To cancel a contract. Material Fact- a fact that is important. Concealment- When an individual makes a false representation by choosing not to reveal important information. Misrepresentation – occurs when a person makes an innocent statement that later turns out to be false.

3. Vocab. Continue Section 6.2 Unilateral mistake – an error on the part of one of the parties to the contract. Bilateral Mistake – Sometimes both parties to a contract are mistaken about an important fact. Duress- overcoming a person’s will by use of force or by threat of force or bodily harm. Economic Duress – Consists of threats to a person’s business or income that cause him or her to enter a contract without real consent. Undue Influence- Occurs when a person uses unfair and improper persuasive pressure to force another person to enter into an agreement.

4. Defective Agreements When the offeror and offeree reach a genuine agreement , this type of agreement is called the Meeting of the minds. There are also three elements consideration, capacity, and legality. There are several circumstances that can create a defective agreement: fraud, misrepresentation, mistake, duress, and undue influence.

5. Fraud If you’ve been induced to enter a contract by fraud you can rescind the contract or you may sue for money damages, you can also try to collect punitive damages. There are five elements to fraud: A false representation of fact Knowledge of the falsity by the party making the false representation Intent to deceive by the party making the false representation Reasonable reliance by the innocent party An actual loss must be suffered by the innocent party.

6. Innocent Misrepresentation Sometimes a person will make an innocent statement that is actually false and that person believed that statement was true at that time, this is misrepresentation.

7. Mistake Unilateral mistake is an error on the part of one of the parties to the contract. It can be a mistake as to the nature of the agreement or a mistake as to the identity of a party. When both parties to a contract are wrong about an important fact its called an bilateral mistake.

8. Duress Duress is overcoming a person’s will by using force, economic duress occurs when a person threatens another person’s business or income to cause someone to enter a contract without true consent. Undue influence is unfair and improper persuasive pressure used by a person to force a friend or family member or a vulnerable person into entering into a contract

9. Study Guide What is fraud? What are three of the five elements a person needs to succeed in a lawsuit for fraud? What is another word for nondisclosure? What is an innocent statement of supposed fact that turns out to be false? What is Duress? When there has been an bilateral mistake what can either party do?

10. Answers to Study Guide 1.Fraud is an deliberate deception intended to secure an unfair or unlawful gain. 2.1)A false representation of fact 2)Knowledge of the falsity by the party making the false representation 3)Intent to deceive by the party making the false representation 3.Concealment 4.Misrepresentation 5. Duress is overcoming a person’s will by using force, economic duress occurs when a person threatens another person’s business or income to cause someone to enter a contract without true consent. 6.Either party can rescind the contract.