1. Genuineness of Assent Chapter 5

2. Genuineness of Assent ► A contract may be voidable if the parties have not genuinely assented to its terms. Assent may be lacking because of Mistakes, Mistakes, Misrepresentation, Misrepresentation, Fraud Fraud Undue influence, or Undue influence, or Duress Duress ► A party who has not truly assented can choose to avoid the transaction.

3. Mistakes It is important to distinguish between mistakes made as to value or quality and mistakes made as to facts. Only mistakes of fact have legal significance.

4. Mistakes of Fact ► Mistakes of fact occur in two forms— Unilateral (mistake by only one of Unilateral (mistake by only one of the contracting parties) the contracting parties) Mutual / Bilateral. (Mistake by both parties) Mutual / Bilateral. (Mistake by both parties)

5. Misrepresentation Misstatement of a material fact justifiable relied upon.

6. Injury to the Innocent Party Most courts do not require a showing of injury when the action is to rescind (cancel) the contract. These courts hold that because rescission returns the parties to the positions they held before the contract was made, a showing of injury to the innocent party is not necessary.

7. Fraudulent Misrepresentation The deference between innocent misrepresentation and fraud is Scienter (pronounced sy-en-ter) Scienter (pronounced sy-en-ter) Knowledge by the misrepresenting party that material facts have been falsely represented or omitted with an intent to deceive. Fraud is also a tort and a party can sue for monetary damages if injury has occurred. (Including punitive damages.)

8. Intent Intent to deceive occurs if a party (1) knows a fact is not as stated; (2) makes a statement he or she believes not to be true or makes it recklessly, without regard to the truth; or (3) says or implies that a statement is made on a basis such as personal knowledge when it is not.

9. Undue Influence ► Undue influence arises from special kinds of relationships in which one party can greatly influence another party, thus overcoming that party's free will.

10. Duress Force or threat of force inducing the other party to enter the contract. Generally, the threatened act must be wrongful or illegal. Threatening to exercise a legal right usually does not constitute duress