Chapter 13 Flashcards
Unilateral mistake
a clerical or mathematical error that is not the result of gross negligence
The mistake is so serious that enforcing the contract would be unconscionable
Mutual Mistake of a Material Fact
Mistake made by both parties concerning a material fact that is important to the subject matter of a contract
Mutual mistake of value
occurs if both parties know the object of the contract but are mistaken as to its value Remains enforceable
Fraudulent misrepresentation
An event that occurs when one person consciously decides to induce another person to rely and act on a misrepresentation
Elements of fraud
The wrongdoer made a false representation of material fact
The wrongdoer intended to deceive the innocent party
The innocent party justifiably relied on the misrepresentation
The innocent party was injured
Fraud in the inception (factum)
Fraud that occurs if a person is deceived as to the nature of his or her act and does not know what he or she is signing
Fraud in the inducement
Fraud that occurs when the party knows what he or she is signing but has been fraudulently induced to enter into the contract
Fraud by concealment
Fraud that occurs when one party takes specific action to conceal a material fact from another party
Silence as misrepresentation
Neither party to a contract owes a duty to disclose all the facts to the other party, unless:
Nondisclosure would cause bodily injury or death
There is a fiduciary relationship between the contracting parties
Federal and state statutes require disclosure
Misrepresentation of law
If one party to the contract is a professional who should know what the law is and intentionally misrepresents the law to a less sophisticated contracting party
Innocent misrepresentation
Fraud that occurs when a person makes a statement of fact that he or she honestly and reasonably believes to be true even though it is not
Duress
A situation in which one party threatens to do a wrongful act unless the other party enters into a contract
