ch.17

Question 1

What is legal assent

Answer 1

It requires the parties have a meeting of the minds, enter contracts voluntarily and
contracts are not “unreasonably” unfair

Question 2

What are the ways that legal assent effects the enforceability of a contract?

Answer 2

• A finding that Parties have Legal Assent will allow Courts to require parties to obey the promises
  exchanged when entering a contract
• Without assent, contract may be Voidable

Question 3

What are the different situations that lead to a Court finding a lack of Legal Assent

Answer 3

• Mistake
• misrepresentation
• undue influence
• duress
• unconscionability

Question 4

What is a mistake?

Answer 4

An erroneous belief by a contracting party about the subject matter of the contract at the time the contract is entered into caused by the mistaken party

Question 5

What is a unilateral mistake?

Answer 5

• One contract party is mistaken
• generally, contract still binding

Question 6

What is a bilateral (mutual) mistake?

Answer 6

• Both parties are mistaken
• Either party can rescind contract

Question 7

What is misrepresentation?

Answer 7

An erroneous belief held by one party concerning the subject matter of the contract a the time the contract is entered into

Question 8

What is innocent misrepresentation?

Answer 8

Contracting party made a false statement of material fact and believed the false statement to be true

Question 9

What are the three types of misrepresentation?

Answer 9

• Innocent
• Negligent
• Fradulent

Question 10

What is negligent misrepresentation?

Answer 10

Contracting party:
- made false statement of material fact
- did not know the false statement was false but should have known
considering their knowledge, skills, experience and expertise surrounding the subject
matter.

Question 11

What is fraudulent misrepresentation?

Answer 11

Contracting party:
- made false statement of material fact
- knew the false statement was false

Question 12

All types of misrepresentation allow the effected party to what on the contract?

Answer 12

To rescind/ void the contract

Question 13

when may the courts also award damages for fraudulent or negligent misrepresentation?

Answer 13

• Intent to deceive
• Justifiable reliance on false assertion by innocent party

Question 14

What is undue influence?

Answer 14

Persuasive efforts of dominant party using a special relationship of trust to interfere with non-
dominant party’s free choice of entering the contract

Question 14

What is looked for to help determine if undue influence is occurring?

Answer 14

Look for unusual degree of trust placed in the dominant party by the non-dominant party

Question 14

Courts will alow unduly influences party to do what to a contract?

Answer 14

To rescind/void the contract

Question 15

What is duress?

Answer 15

When one party is forced, either physically or economically, into an agreement by a wrongful act
of another

Question 15

What are the factors that help the courts find undue influence?

Answer 15

• Dominant party rush the other party to consent
• Dominant party gain undue enrichment from the contract
• If the nondominant party isolated from other advisers at time of contract
• Contract effect overwhelmingly benefits dominant party

Question 16

What makes duress different from legal assent

Answer 16

For duress, threat interferes with contracting party’s free will

Question 17

What is the effect of Duress on Contract Enforceability?

Answer 17

Courts will allow affected party to rescind/void the contract agreement, if the affected party proves duress left no reasonable alternatives to contractual agreement

Question 18

What is unconscionability?

Answer 18

When a contract is unreasonable unfair to one of the parties through either its formation or
operation

Question 19

What are the two types of Unconscionability?

Answer 19

• Procedural
• Substantive

Question 20

What is procedural unconscionability?

Answer 20

The process by which the party was induced into the contract was unfair (Formation)

Question 21

What is substantive unconscionability?

Answer 21

The terms of the contract as applied are unfair (Operation)

Question 22

What is the effect of Unconscionability on Contract enforceability?

Answer 22

Courts allow the effected party to rescind/void the contract