ES 2.00 UNDERSTAND
CONTRACT LAW
Obj. 2.01 Understand the elements and characteristics of a contract
2.01 B Genuine Agreement
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
Overcoming a person’s free will by use of force or by threat of force
or bodily harm
 Threats of Illegal Conduct
Duress
 Threats to Report Crimes
 Threats to Sue
 Threats to sue made for purpose unrelated to the suit
 Economic Duress
 Threats to a person’s business or income
 Unfair and improper persuasive pressure within a relationship of
trust
Undue
Influence
 Must be able to prove:
 Relationship of trust, confidence or authority
 Unfair persuasion
An error on the part of one of the parties
Unilateral
Mistake
 Does not affect validity of the contract
 Cannot get out of contract
 Nature of the Agreement
 Signing a contract you don’t understand or have not read
 Signing a contract in a language you don’t understand
Both parties are mistaken about an
important fact
Mutual
Mistake
(Bilateral
Mistake)
 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
Innocent statement of supposed fact that turns out to be false
Innocent
Misrepresentation
 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
Party to a contract deliberately makes an untrue statement of fact
Fraudulent
Misrepresentation

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
 Untrue statement of fact
Proving
Fraudulent
Misrepresentat
ion
 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
 Reasonable Reliance
Proving
Fraudulent
Misrepresentat
ion
 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