I: Mistake– Error by one or more parties to a contract which MAY end it.
a) Nature of Agreement: If a party fails to throughly understand all terms of a contract, they can’t avoid the contract.
b) Identity of the Party: can be voided
2. Bilateral Mistake- (Mutual Mistake) When both parties make an error in an important fact.
a) Impossibility of Performance: When the material fact or subject matter can not perform both parties may avoid it.
b) Subject Matter: If the identity of the subject matter is in error, the contract can be avoided.
II: Fraud- The deliberate deception to secure an unfair gain.
1. False Representation of a Fact
a) Mutual fact: Anything that is important that was sold in the sale.
b) Concealment: Deliberately hiding something important to the sale. (non-disclosure)
2. False Representation was known
Rescind- To take back your acceptance based on deception.
Material Fact- Important fact that directly influenced the agreement.
Concealment- Falsely representing by not saying or by covering up.
3. False representation was intended to be relied upon.
4. False representation was actually relied upon.
5. Resulting Loss
III: Innocent Misrepresentation- Statement of a fact that was believed to be true, but then turns out to be false. Injured party has a right to rescind the acceptance.
IV: Duress- Influencing someone to enter into an agreement by threats or threats of bodily harm.
Economic Duress- Influencing based on someone’s income or job.
V: Undue Influence- Unfair and improper persuasive pressure exercised to cause someone to enter a contract or an agreement. Avoid the contract.