Chapter 13 BLS Flashcards

Chapter 13 (BLS) Flashcards

• Requirements for Mutual Mistake?1) The mistake relates to a basic assumption on which the

contract was made2) The mistake has a material effect on the agreed-upon exchange3) The party adversely affected by the mistake doesn't bear the risk of the mistake Ratification (Def)A person who had the right to rescind had elected not to do

so; ends the right to rescind(Ex: You think something is

wrong with the car you bought; however, you just ignore it and keep paying rent. You give up your right to end the contract) Concealment (Def)The active hiding of a fact Scienter (Def)With intent or knowledge of wrongdoing Economic Duress AKA Business Compulsion (Def) Used to describe situations in which one person induces the formation or modification of a contract by threatening another's economic interests.Duress (Def)Wrongful coercion that induces a person to enter or modify a contract.In order to seek to rescind a contract on ground of

misrepresentation, need to establish:

1) An untrue assertion of fact was made2) The fact asserted was material or the assertion was fraudulent3) The complaining party entered the contract because of reliance on the assertion4) The reliance of the complaining party was reasonableIf searching for damages of deceit 5) Injury Nondiscolsure (Def)Failure to volunteer info

T or F: Even if the mistake is mutual, the adversely affected

party won't have the right to avoid the contract unless the mistake concerns a basic assumption on which the contract was based.T It is possible to avoid contracts for unilateral mistake but to do so you must prove the elements necessary on top of proving the element of mistake 1) The non mistaken party caused or had reason to know

of the mistake: the non mistaken person could have

prevented the loss by acting in good faith and informing the person in error that he had made a mistake2) It would be

unconscionable to enforce the contract: to show this, the

mistaken party would have to show that the consequences of the mistake were sever enough that it would be unreasonably harsh to enforce the contract.The concealment of a fact intended to prevent the other party from discovering the fact is considered assertion and can be the basis for what?Claim of misrepresentation or fraud.You must establish what two elements to rescind a contract because of duress?1) The contract was induced by an improper threat2) The victim had no reasonable alternative but to enter the contract

A person who commits fraud can be liable for the damages for the tort of _____ Deceit Undue Influence (Def)Unfair persuasion, involves wrongful pressure exerted on a person during the bargaining process. Pressure is extorted through persuasion rather than coercion.How to determine undue influence?1) The relationship between the parties is either one of trust and confidence or one in which the person exercising the persuasion dominates the person being persuaded2) The persuasion is unfair Caretaker of sick person persuades them to give life savings example of what?Undue Influence