understanding business and personal law mistake, duress, and undue influence section 6.2 genuine...

Understanding Business and Personal Law

Mistake, Duress, Mistake, Duress, and Undue Influence and Undue Influence

Section 6.2Section 6.2

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In addition to fraud and In addition to fraud and misrepresentation, mistake, duress, misrepresentation, mistake, duress, and undue influence can also create a and undue influence can also create a defective agreement.defective agreement.

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Genuine Agreement

Pre-Learning Question Pre-Learning Question

How can a mistake disrupt an agreement?




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Mistake Mistake

People sometimes enter into contracts People sometimes enter into contracts believing that certain information is believing that certain information is true when it is actually not, or that true when it is actually not, or that information is not true when it really is.information is not true when it really is.




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Unilateral Mistake Unilateral Mistake

A A unilateral mistakeunilateral mistake is an error on is an error on the part of one of the parties to the the part of one of the parties to the contract.contract.Through words or actions, one party Through words or actions, one party has created reasonable has created reasonable expectations on the part of the other expectations on the part of the other party to the contract.party to the contract.




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Those expectations should not be Those expectations should not be blocked because one of the parties blocked because one of the parties has made an error, or mistake.has made an error, or mistake.A person usually cannot avoid a A person usually cannot avoid a contract because of such a mistake contract because of such a mistake




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There are two types of unilateral There are two types of unilateral mistakes. mistakes.

1.1. Mistake as to the nature of the Mistake as to the nature of the agreementagreement

2.2. Mistake as to the identity of a party Mistake as to the identity of a party




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Mistake as to the Mistake as to the Nature of the Agreement Nature of the Agreement

People who sign an agreement are People who sign an agreement are bound to it, even if they have not read bound to it, even if they have not read it or are mistaken about what it says.it or are mistaken about what it says.




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Mistake as to the Mistake as to the Identity of a Party Identity of a Party

If you make an offer by letter to one If you make an offer by letter to one party, but the wrong person party, but the wrong person mistakenly receives the offer, the mistakenly receives the offer, the mistake may be cause to void the mistake may be cause to void the contract.contract.




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Mistake as to the Mistake as to the Identity of a Party Identity of a Party

If you make the same offer face-to-If you make the same offer face-to-face with a person whose identity you face with a person whose identity you have mistaken, your mistake as to the have mistaken, your mistake as to the identity will not prevent a binding identity will not prevent a binding contract.contract.




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6.26.2

Remedies for Unilateral Mistakes Remedies for Unilateral Mistakes

1.1. Mistake as to the Mistake as to the nature of the nature of the agreement.agreement.

2.2. Mistake as to the Mistake as to the identity of a partyidentity of a party

1.1. Mistake as to the Mistake as to the nature of the nature of the agreement.agreement.

2.2. Mistake as to the Mistake as to the identity of a partyidentity of a party

Unilateral MistakeUnilateral MistakeUnilateral MistakeUnilateral Mistake

RemedyRemedy RemedyRemedy

1.1. Rescission will not Rescission will not be granted.be granted.

2.2. Rescission may beRescission may begranted. granted.

1.1. Rescission will not Rescission will not be granted.be granted.

2.2. Rescission may beRescission may begranted. granted.

Type of MistakeType of Mistake




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Bilateral Mistake Bilateral Mistake

When both parties to a contract are When both parties to a contract are mistaken about some important fact, mistaken about some important fact, this is called a this is called a bilateral mistakebilateral mistake, or , or mutual mistake.mutual mistake.When this mistake occurs, either When this mistake occurs, either party may avoid the contract.party may avoid the contract.




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Bilateral Mistake Bilateral Mistake

There are two types of bilateral There are two types of bilateral mistakes. mistakes.

1.1. Mistake as to the possibility of Mistake as to the possibility of performanceperformance

2.2. Mistake as to the subject matterMistake as to the subject matter




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Mistake as to the Mistake as to the Possibility of Performance Possibility of Performance

If both parties enter into a contract If both parties enter into a contract believing that the duties described in believing that the duties described in the agreement can be performed, the agreement can be performed, when in fact, they cannot, either party when in fact, they cannot, either party may avoid the contract.may avoid the contract.




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6.26.2

Remedies for Bilateral Mistakes Remedies for Bilateral Mistakes

1.1. Mistake as to Mistake as to possibility of possibility of performance.performance.

2.2. Mistake as to the Mistake as to the subject matter. subject matter.

1.1. Mistake as to Mistake as to possibility of possibility of performance.performance.

2.2. Mistake as to the Mistake as to the subject matter. subject matter.

Bilateral MistakeBilateral MistakeBilateral MistakeBilateral Mistake

RemedyRemedy RemedyRemedy

1.1. Rescission will be Rescission will be granted.granted.

2.2. Rescission will be Rescission will be granted. granted.

1.1. Rescission will be Rescission will be granted.granted.

2.2. Rescission will be Rescission will be granted. granted.

Type of MistakeType of Mistake




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True or false—Both parties may avoid contracts involving unilateral and bilateral mistakes.




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ANSWERANSWER

False




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What do you think duress is?




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DuressDuress

DuressDuress is overcoming a person’s will is overcoming a person’s will by use of force or threat of force or by use of force or threat of force or bodily harm.bodily harm.




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Types of Duress Types of Duress

Physical duress is when actual Physical duress is when actual physical violence is used to force a physical violence is used to force a person to enter a contract.person to enter a contract.

Emotional duress is when the threat of Emotional duress is when the threat of physical force is used to force a physical force is used to force a person to enter a contract.person to enter a contract.




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Types of Duress Types of Duress

Economic duress Economic duress is when threats to is when threats to a person’s business or professional a person’s business or professional reputation are used to force a party to reputation are used to force a party to enter a contract.enter a contract.




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What do you think undue influence is?




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Undue Influence Undue Influence

Undue influenceUndue influence occurs when a occurs when a person uses unfair and improper person uses unfair and improper persuasive pressure to force another persuasive pressure to force another person to enter into an agreement. person to enter into an agreement.




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Undue Influence Undue Influence

Circumstances such as ill health, old Circumstances such as ill health, old age, and mental immaturity may put a age, and mental immaturity may put a person in a weaker position.person in a weaker position.

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