9.1

b a c k n e x th o m e

Chapter 9 Objectives

Describe the mistakes that do not invalidate a contract.

State what types of mistakes normally invalidate contracts.

Identify the situations in which fraud, duress, or undue influence are present.

Explain the remedies available to the victim of acts rendering contracts voidable.

9.2

b a c k n e x th o m e

Agreement or Mistake?

Mark agrees to sell Geraldine his car for $3,000, without specifying it was a 1989 Toyota. She could view it by driving to his home where it would be in the driveway. Unknown to Mark, his wife had come home early and parked their Ferrari in the driveway. Geraldine sees the Ferrari and thinks it could be bought for $3,000. She immediately tells Mark she wants to buy it. Has there been a meeting of the minds?

No - the mistake was mutual.© 2002 West Educational Publishing To accompany Law for Business, 14e, by Ashcroft and Ashcroft

Let’sDiscuss Let’s

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9.3

b a c k n e x th o m e

Mutual Mistakes

A mutual mistake will render a contract defective except in what mistakes?

a. Value, quality, or price

b. Terms of the contract

c. The law

d. ExpectationsAre parties to contracts expected to

have knowledge of the law?Yes

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9.4

b a c k n e x th o m e

Kinds of Fraud

Fraud in theInducementFraud in theInducement

Fraud in theExecution

Fraud in theExecution

Active Fraud Active Fraud

PassiveFraud

PassiveFraud

InnocentMisrepresentation

InnocentMisrepresentation

9.5

b a c k n e x th o m e

Duress

Give an example of each of the following types of duress:

Physical

Emotional

Financial

Explain the difference between undue influence and duress.

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9.6

b a c k n e x th o m e

Remedies for Breachof Contract

You may sue to recover money, goods, or other things of value.

If the contract is executory on your part, you may sue to perform.

You may sue to have the contract judicially declared void.

You may sue for reformation (correction) of the contract.