Exam 13: Genuineness of Assent and Undue Influence

The threat to bring a criminal charge (lawsuit)or civil lawsuit is duress.

Where two parties contract for the purchase and sale of an ordinary item,such as a desk,that unknown to both parties is a rare and valuable example of that item,this is:

Under which of the following circumstances can the mistaken party rescind a contract when there is a unilateral mistake?

A contract between two parties in a fiduciary relationship,which unduly benefits the dominant party,is presumed to have been made under undue influence.

A fraudulent misrepresentation may be used to show that genuine assent was lacking in a parties' contract.

Generally,a mutual mistake does not allow either party to rescind the contract.

Billy is out in the bars one hot August afternoon and runs into Carl Coach,who coaches the football team where he went to college.Billy invites Carl to join him for drinks,and they have the following conversation: Billy: I need to talk to you about the upcoming football season.I need you to make sure that the football team wins each game by as much as possible.For each game that the team wins by at least 25 points,I'll give you $1,000. Carl: I don't know if I can promise that.I don't know if any coach could. Billy: Well,I'll even give you an extra $500 if it's by more than 35 points. Carl: That sounds good.I can do that with this team. Billy: Great! Here's to a good season! And,they toast pitchers of beer.The team is undefeated that year,winning all but two games by more than 25 points and 3 of them by more than 35 points.The other two games were each won by 20 points.At season's end,Billy has paid nothing to Carl.Carl sues Billy for payment.Billy sues Carl to recover loses caused because of bets he placed in the two games won by only 20 points.Discuss the arguments that each has with respect to this agreement and the likely outcome.

Ordinarily,silence is not a misrepresentation.

If someone buys a piece of artwork which neither the buyer nor seller knows is a masterpiece,this is considered a mutual mistake of value.Can the seller rescind such a contract? If,however,a buyer and seller think the piece of artwork being sold is a particular masterpiece,but in fact it is not,this is considered a mutual mistake of fact.Can the buyer in this case rescind the contract? Why is the result different in these two situations? What is different about the two situations that would suggest that they have different outcomes?

Why is there a requirement to prove reliance in order to recover for fraud? Why should the law not penalize a person who knowingly makes a false statement,regardless of whether the person to whom the statement is made can prove reliance? Would there be any practical problems if the reliance requirement were eliminated?

Which of the following statements is true regarding duress?

Gerald was a subcontractor,bidding on a contract for XYZ Corp.,the general contractor.When adding up the total of materials and labor,Gerald's secretary made a clerical error with a total of $45,000 instead of $450,000.Gerald then submitted his bid for $45,000.XYZ accepted Gerald's bid of $45,000,mostly because all the other bids were over $400,000.When Gerald learns of his mistake,he tells XYZ that he cannot perform the contract.If XYZ sues to enforce this contract,what is the most likely result?

You buy a pair of very used skis for $25 from a store in Steamboat Springs.You learn later that Billy Kidd,a famous skier,owned the skis years ago.The store demands that you return them because it did not know that they once belonged to Billy Kidd.Which is true?

In undue influence,the persuasion by the dominant party must have overcome the free will of the innocent party.

In a situation where one party to a contract has lied about the subject matter in order to entice the other party to enter into a contract,the type of fraud that would most likely be present is:

The assent of parties to a contract must be voluntary.

Kevin disconnects the odometer on his car and then drives it for another 15,000 miles after which he decides to sell it.When Linda inquires about the vehicle,Kevin says "the odometer indicates the car has only 20,000 miles on it." Kevin's statement is:

Which of the following best describes duress?

Bill sells some old books to Marion for a small sum of money.A few weeks later,Marion discovers that the books are quite valuable,worth as much as $50,000.Bill seeks to rescind the contract.What is the most likely result?

Jennifer was shopping at Good Deal Auto Sales.The salesperson showed her one particular car that caught her fancy.The salesperson said that the car was a 1999 model,only had 25,000 miles,had been overhauled one year ago,and was the best buy for the money anywhere in town.Jennifer knew the car was a 1998 model,but otherwise she believed the salesperson.She bought the car.Later it is discovered that the car had 125,000 miles,had been overhauled 14 months ago,and that a better buy existed at another dealer.Each of these things makes the car worth much less than Jennifer paid for it.The salesperson and the dealership knew all these things.Jennifer sues for fraud.Which of the following best describes this situation?