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ES 2.00 UNDERSTAND CONTRACT LAW Obj. 2.01 Understand the elements and characteristics of a contract 2.01 B Genuine Agreement.

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Presentation on theme: "ES 2.00 UNDERSTAND CONTRACT LAW Obj. 2.01 Understand the elements and characteristics of a contract 2.01 B Genuine Agreement."— Presentation transcript:

1 ES 2.00 UNDERSTAND CONTRACT LAW Obj Understand the elements and characteristics of a contract 2.01 B Genuine Agreement

2 GENUINE AGREEMENT (ASSENT) A valid offer has been made by the offeror, and a valid acceptance has been exercised by the offeree Several causes for genuine agreement to be lacking in a contract Duress Undue Influence Unilateral or Mutual Mistake Innocent Misrepresentation Fraudulent Misrepresentation

3 Duress Overcoming a persons free will by use of force or by threat of force or bodily harm Threats of Illegal Conduct Threats to Report Crimes Threats to Sue Threats to sue made for purpose unrelated to the suit Economic Duress Threats to a persons business or income

4 Undue Influence Unfair and improper persuasive pressure within a relationship of trust Must be able to prove: Relationship of trust, confidence or authority Unfair persuasion

5 Unilateral Mistake An error on the part of one of the parties Does not affect validity of the contract Cannot get out of contract Nature of the Agreement Signing a contract you dont understand or have not read Signing a contract in a language you dont understand

6 Mutual Mistake (Bilateral Mistake) Both parties are mistaken about an important fact Impossibility of Performance Contract is impossible to perform Contract is void Subject Matter Either party can void contract Existing Law Contract is valid Parties are expected to know the law

7 Innocent Misrepresentation Innocent statement of supposed fact that turns out to be false Statement must be one of fact Statement must be material Statement must be relied upon Injured party has the right to rescind (take back) the offer No rights to damages

8 Fraudulent Misrepresentation Party to a contract deliberately makes an untrue statement of fact Deliberate: Done with or marked by full consciousness of the nature and effects; intentional Deception: The fact or state of being deceived Gain: To secure as profit or reward In order to prove fraud, you must prove the above 3 definitions

9 Proving Fraudulent Misrepresentat ion Untrue statement of fact Must be one of fact, not opinion Active concealment Silence – may stay silent about defects except when: statement is about material facts True statement is made false by subsequent events One party knows the other party has made a basic mistaken assumption Materiality Statement would cause reasonable person to contract If one party knows the other party would rely on the statement If one party knows the statement is false

10 Proving Fraudulent Misrepresentat ion Reasonable Reliance One party must reasonable rely on statement Intentional or reckless One party deliberately lies or conceals a material fact One party recklessly makes a false statement of fact, without knowing whether it is true or false Statement must be intended to induce party to enter into contract Resulting Loss Must cause an injury


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