Chapter 12: Reality of Assent (unedited)

voidable

lack of genuine assent makes contracts _________

rescind

cancel a contract

the return of everything she or he gave the other party

the cancelation of a contract permits the person who canceled it to require ____________________

mistake, misrepresentation, undue influence, duress

major obstacles of genuine assent

absent

legal assent is _______ when a legal mistake occurs

mistake

An erroneous belief about the facts of a contract at the time the contract is concluded. When a mistake occurs, legal assent is absent

do not

mistakes mistakes in contract law ________ result from the untrue statements of the other party to the contract

unilateral or mutual

mistakes may be

unilateral mistake

the result of an error by one party about a material fact

mutual mistake

the result of an error by both parties about a material fact

does not.

a unilateral mistake _______ void a contract.

unilateral

recession is permitted for _______ mistakes

conditions that would permit a court to invalidate a contract on grounds of a unilateral mistake

one party made a mistake about a material fact and the other party either knew or had reason to know about the mistake, the mistake was caused by a clerical error that did not result from gross negligence, the mistake was so serious that the contract is unconscionable, that is, so unreasonable that it is outrageous

rescind the contract

When both parties to a contract are mistaken about either a current or a past material fact, either party can choose to __________

a basic assumption about the subject matter of the contract, a material effect on the agreement, an adverse effect on a party that did not agree to bear the risk of mistake at the time of the agreement

for a mutual mistake to interfere with legal consent it must involve all the following

will not

courts _________ void contracts for reason of mutual mistake if even one of the preceding attributes is missing

misrepresentation

an untruthful assertion by one of the parties about a material fact

innocent misrepresentation

A false statement about a fact material to an agreement that the person who made the statement believed to be true.

rescind the contract

Innocent misrepresentations permit the party that was misled by the false statement to ___________

negligent misrepresentation

A false statement of material fact made by a party who thinks it is true but who would have known the truth about the fact had he or she used reasonable care to discover or reveal it.

fraudulent misrepresentation

A false representation of a material fact that is consciously false and is intended to mislead the other party.

intentional misrepresentation

A false representation of a material fact made by a party who either knows or believes that the factual claim is false or knows that there is no basis for the assertion. Scienter is clear.

concealment, nondisclosure

____________ or ____________ can be treated as the equivalent of an actual assertion

does not

for fraudulent misrepresentation to be the basis for a contract rescission, the statement of fact _____ need to be an actual assertion

concealment

the active hiding of the truth about a material fact

nondisclosure

a failure to provide pertinent information about a projected contract

actual false assertion

courts find nondisclosure as having the same legal effect as an _________________ under certain conditions

1. a relationship of trust exists between the parties to the contract 2. there is failure to correct assertions of fact that are no longer true in light of events that have occurred since the initial consent to the terms of the agreement

conditions that must be met to find non disclosure as having the same legal effect as an actual assertion

undue influence

The situation in which one person has taken advantage of his or her dominant position in a relationship to persuade the other person unduly to the extent that the dominant person's persuasive efforts have interfered with the other person's ability to make his or her own decision.

duress

an unlawful act or threat exercised on a person whereby the person is forced to enter into an agreement or to perform some other act against his or her wilo