1. Law For Personal And Business Use
Chapter 8 – Genuine Agreement

2. Contracts: Quick Review
What is needed to create a contract?
Offer
Acceptance
Chapter 8 – Genuine Agreement

3. Quick Review Continued
What are the 3 requirements of an Offer?
Intent to Create a Legal Obligation
Complete and Certain
Communicated
Chapter 8 – Genuine Agreement

4. Quick Review Continued
What are the 6 ways an offer can be ended?
Revocation
Rejection
End of a Stated Time
End of a Reasonable Time
Counteroffer
Death or Insanity
Chapter 8 – Genuine Agreement

5. Quick Review Continued
What are the two ways an offer can be kept open?
Firm Offer
Option
Chapter 8 – Genuine Agreement

6. Quick Review Continued
What are the 3 requirements of an Acceptance?
Only by offeree
Exactly as offered
Communicated
Chapter 8 – Genuine Agreement

7. Quick Review Concluded
What appears to be the result of a valid offer and a valid acceptance
A valid enforceable Contract
But……there’s more to the story!
Chapter 8 – Genuine Agreement

8. Chapter 8 – Genuine Agreement
What Else is Needed?
Genuine Agreement
Evidenced by words or conduct between parties
Also called Genuine or Mutual Assent
May be lacking due to:
Duress (8-1)
Undue Influence (8-1)
Fraud (8-2)
Misrepresentation (8-2)
Certain Mistakes (8-2)
Chapter 8 – Genuine Agreement

9. What Happens if there is no Genuine Assent?
Lack of Genuine Assent can make a Contract Voidable
Voidable contracts can be avoided (rescinded) by the injured party.
Injured party can then rescind and back out of contract
Chapter 8 – Genuine Agreement

10. What is Rescission? Backing out of the transaction by
Asking for return of anything given
Giving back anything received
Rescission must be prompt
Shortly after discovering lack of genuine assent
Must occur before ratification
Chapter 8 – Genuine Agreement

11. Chapter 8 – Genuine Agreement
What is Ratification?
Conduct suggesting Intent to be Bound
Stating you want to be Bound
Certain Acts
Sell/Give Away
Continue to Use
Waiting beyond a reasonable time
Chapter 8 – Genuine Agreement

12. What Happens if You Ratify?
Results in a Valid Enforceable Contract
Ratification cannot be withdrawn
Chapter 8 – Genuine Agreement

13. Chapter 8 – Genuine Agreement
What Is Duress?
Improper threat or act to obtain agreement
Threats of illegal conduct
Threats to report crimes
Must report crimes, cannot use extortion
Threats to sue
When made for purpose unrelated to suit
Chapter 8 – Genuine Agreement

14. Chapter 8 – Genuine Agreement
What Is Duress?
Improper threat or act to obtain agreement (continued)
Economic threats
Courts look at both threat and alternatives available to threatened party
If threatened party had no choice but to contract, duress exists
Chapter 8 – Genuine Agreement

15. What Is Undue Influence?
When one party to contract is in position of trust and wrongfully dominates other party
Must have relationship
Relationship of trust
Authority or confidence must exist between parties
Formal relationship is not necessary
Elderly/handicapped and caretaker
Chapter 8 – Genuine Agreement

16. What Is Undue Influence?
Must have unfair persuasion
To prevent claim, stronger party should:
Act with complete honesty
Fully disclose important facts
Insist weaker party obtain legal counsel
Chapter 8 – Genuine Agreement

17. Chapter 8 – Genuine Agreement
Review
Think About Legal Concepts, p. 118
Think Critically About Evidence, p. 118
Label and include in notebook
Chapter 8 – Genuine Agreement

18. What Creates Lack Of Genuine Assent?
Mistake
Not always
Misrepresentation
Fraud
Chapter 8 – Genuine Agreement

19. What Is A Unilateral Mistake?
One party holds incorrect belief about fact(s) related to content
Generally, this does not affect validity of contract
Contract still valid if:
Failed to read contract
Hurried or were careless in reading of contract
Signed when contract written in language not understood
Chapter 8 – Genuine Agreement

20. What Is A Unilateral Mistake?
Contract is voidable if:
Recognized unilateral mistake
Major mistake and other party is aware
Induced unilateral mistake
One party encourage or influenced other to make mistake
Chapter 8 – Genuine Agreement

21. What Are Mutual Mistakes?
Both parties have incorrect belief about important fact
Mistake about subject matter
Contract is void
Mistake of law
Contract is valid
Ignorance of law no excuse
Mistake about material facts
Must have reasonably relied on statement
Chapter 8 – Genuine Agreement

22. What Is Misrepresentation?
Innocent misrepresentation
Fraudulent misrepresentation
Both defenses make the contact voidable
Chapter 8 – Genuine Agreement

23. How Are Statements Treated As Misrepresentations?
If untrue statement is one of fact or there is active concealment
Must be fact, not opinion
When experts express opinion, considered fact
Concealing important mistake or problem
Silence misleads
Chapter 8 – Genuine Agreement

24. How Are Statements Treated As Misrepresentations?
If statement is material:
Statement would cause reasonable person to contract
Defendant knew plaintiff would rely on statement
Defendant knew statement was false
If plaintiff reasonably relied on statement
Chapter 8 – Genuine Agreement

25. Chapter 8 – Genuine Agreement
What Is Fraud?
Must be based on misrepresentation
Untrue statement of fact
Materiality
Reasonable reliance
Must also prove:
Intent
Injury
May have intentional
misrepresentation but if no
injury, no liability for fraud
Chapter 8 – Genuine Agreement

26. Chapter 8 – Genuine Agreement
What Is Fraud?
Misrepresentation intentional when person:
Deliberately lies or conceals material fact
Recklessly makes statement not knowing if it is true or false
Intends to induce victim to contract
Chapter 8 – Genuine Agreement

27. What Remedies Are There For Fraud?
Rescission
Contracts voidable
Compensatory damages
May be recovered in amount that was lost
Punitive damages
Money awarded in amount that punishes to make example of party who committed fraud
Punitive available because fraud is intentional tort
Chapter 8 – Genuine Agreement

28. What Remedies Are There For Fraud?
Victim can file for one or both forms of damages
Victim may be awarded one or both forms of damages
Chapter 8 – Genuine Agreement

29. Chapter 8 – Genuine Agreement
Review
Think About Legal Concepts, p. 123
Think Critically About Evidence, p. 123
Label and include in notebook
Chapter 8 – Genuine Agreement