Contracts - Mistakes, Fraud, and Voluntary Consent

This set of flashcards covers key concepts related to mistakes, fraudulent misrepresentation, undue influence, and duress in contract law.

Mistake of Material Fact

A mistake that might allow a contract to be canceled.

Unilateral Mistake

A mistake made by one party, generally still enforceable unless specific conditions are met.

Bilateral (Mutual) Mistake

A mutual misunderstanding by both parties, allowing either party to rescind the contract.

Mistakes of Value

A mistake about the future value or quality of the object of the contract, generally still enforceable.

Fraudulent Misrepresentation

Where an innocent party is induced to enter a contract by a misrepresentation that was intended to deceive.

Required Elements of Fraudulent Misrepresentation

Includes misrepresentation of material fact, intent to deceive, justifiable reliance on the misrepresentation, and injury to the innocent party.

Innocent Misrepresentation

Occurs when a person makes a statement believed to be true but actually misrepresents facts, allowing for contract rescission without damages.

Negligent Misrepresentation

Failure to use reasonable care in disclosing facts, which can mislead another party.

Justifiable Reliance

The deceived party’s justified reason for relying on the misrepresentation.

Undue Influence

Occurs when one party utilizes their influence over another, often in trusted relationships, resulting in a lack of genuine consent.

Duress

When a party enters into a contract under fear or threat, making the contract voidable.

Economic Duress

A situation where economic pressure is exerted, generally not sufficient on its own to constitute duress.