Business Law Mistakes, Fraud, and Voluntary Consent Vocabulary

Adhesion contracts

A “standard-form” contract, such as that between a large retailer and a consumer, in which the stronger party dictates the terms

Bilateral mistake

A type of contract that arises when a promise is given in exchange for a promise

Duress

Unlawful pressure brought to bear on a person, causing the person to perform an act that he or she would not otherwise perform (or refrain from doing something that he or she would otherwise do).

Innocent misrepresentation

A false statement of fact or an act made in good faith that deceives and causes harm or injury to another

Latent defects

A defect that is not obvious or cannot readily be ascertained.

Negligent misrepresentation

Any manifestation through words or conduct that amounts to an untrue statement of fact made in circumstances in which a reasonable and prudent person would not have done that which led to the misrepresentation. A representation made with an honest belief in its truth may still be negligent due to (1) a lack of reasonable care in ascertaining the facts, (2) the manner of expression, or (3) the absence of the skill or competence required by a particular business or profession

Scienter

Knowledge by the misrepresenting party that material facts have been falsely represented or omitted with an intent to deceive.

Undue influence

Persuasion that is less than actual force but more than advice and that induces a person to act according to the will or purposes of the dominating party.

Unilateral mistake

A mistake that occurs when one party to a contract is mistaken as to a material fact.

Voluntary consent

Knowing and voluntary agreement to the terms of a contract. If voluntary consent is lacking, the contract will be voidable.