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Business Law, Ch.17, key terms
Terms in this set (19)
Contract created by a party to an agreement that is presented to the other party on a take-it-or-leave-it basis.
Such contracts are legal, but are sometimes rescinded on the grounds of unconscionability and absence of one party's free will to enter a contract.
Active hiding of the truth about a material fact.
Any unlawful act or threat exercised on a person whereby the person is forced to enter into an agreement or to perform some other act against his will.
In contracts, a false representation of a material fact that is consciously false and is intended to mislead the other party.
To avoid contract based on fraudulent misrepresentation, the innocent party must establish that the other party:
1. Knowingly, or with reckless disregard for the truth, and
2. With the intent to deceive the innocent party,
3. Misstated or omitted a material fact on which:
-A reasonable person would rely in deciding on under what terms to enter in the contract and
-The innocent party relied on fraudulent facts to his detriment.
Must have following elements:
1. Justifiable reliance
2. Intent to deceive
4. False statement
False statement made about a material fact by a person who believed the statement was true.
Promise to buy or sell that the courts will require that the parties obey.
Contract may be unenforceable if the parties have not genuinely agreed to contract's material terms.
An untruthful assertion by one of the parties about a material fact.
Mistake of fact
Allows a contract to be rescinded, it is NOT a mistake of opinion, value, or quality.
A mistake that is not caused by neglect of a legal duty by the person committing the mistake, but of unconscious ignorance of a past or present material event or circumstance.
Result of an error by both parties about a material fact, i.e., one that is important in the context of a particular contract.
False statement of material fact made by a person who thinks it is true, but who would have known the truth about the fact had he used reasonable care to discover or reveal it.
Failure to provide pertinent information about a projected contract.
To cancel a contract.
Deliberately or knowingly acting with the intent to deceive.
1. Make a statement he knows to be false,
2. Makes a statement he reasonably believes to be false,
3. Makes a statement recklessly, without regard to its truthfulness or falsity, or
4. Implies that he bases the statement on information or expertise on which it is not, in fact, based.
Ground for rescinding an unconscionable contract.
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