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Genuineness of assent

Generally, a party who demonstrates that he did not genuinely assent (agree) to the terms of a contract can choose either to carry out the contract or to rescind (cancel) it and thus avoid the entire transaction


only mistakes of fact allow a contract to be avoided

Unilateral mistakes

Occurs when only one party is mistaken as to a material fact (a fact important to the subject matter of the contract). The contract is normally enforceable against the mistaken party unless the other party knew or should have known that a mistake of fact was made or a math mistake was made.

Bilateral mistake (mutual)

When both parties are mistaken about the same material fact, the contract can be rescinded by either party.

Fraudulent misrepresentation

When an innocent party consents to a contract with fraudulent terms the contract usually can be avoided because she has not voluntarily consented to the terms. Involves 3 elements
1. a misrepresentation of facts must occur
2. there must be intent to deceive
3. the innocent party must justifiably rely on the misrepresentation

Misrepresentation by conduct

if a seller, by his actions, prevents a buyer from learning some fact that is material to the contract, such behavior constitutes Misrepresentation by conduct

Misrepresentation by law

normally does not entitle a party to be relieved of a contract because people are assumed to know local and state laws.

Misrepresentation by silence

Normally neither party has a duty to come forward and disclose facts. The seller must only disclose "latent" defects that could not readily be discovered. Unless there is a fiduciary relationship

Fiduciary relationship

When the parties are in this relationship (one of trust ex doc-patient, partners, atty-client) there is a duty to disclose material facts, failure to do so may constitute fraud.


Knowledge by the misrepresenting party that the material facts have been falsely represented or omitted with an intent to deceive.

Reliance on Misrepresentation

The deceived party must have a justifiably reason for relying on the Misrepresentation, and the Misrepresentation must be an important factor (not necessarily sole factor) in inducing the party to enter the contract.

Undue Influence

Arises from relationships in which one party can greatly influence another party, thus overcoming that party's free will. Generally a voidable contract.


Forcing a party to enter into a contract because of the fear created by threats.

Statute of Frauds

A state statute under which certain types of contracts must b in writing to be enforceable.
-involving interests of land
-cannot by their terms be performed within one year from the date of the formation
-collateral contracts, such as promises to answer fir the debt or duty of another
-promises made in consideration of marriage
-for sale of goods priced over $500

Contracts involving interest in land

land is a form of real property, or real estate, which includes not only land but all physical objects that are permanently attached to the soil, such as buildings, plants, trees and the soil itself.

One year rule

An executory contract that cannot be performed by its own terms within one year of its formation must be in writing. The year begins the day after the contract is formed.

Collateral promise

A secondary promise that is ancillary (subsidiary) to a principal transaction or primary contractual relationship, such as a promise made by one person to pay the debts of another if the latter fails to perform. A collateral promise normally must be in writing to be enforceable.

The "Main Purpose" rule

An oral promise to answer for the debt of another is covered by the Statute of Frauds unless the guarantor's purpose in accepting secondary liability is to secure a personal benefit.

Prenuptial Agreement

An agreement made before marriage that defines each partner's ownership rights in the other partner's property. It must be in writing.

Partial Performance

Whether a court will enforce an oral contract for an interest in land when partial performance has taken place is usually determined by the degree of injury that would be suffered if the court chose not to enforce the oral contract.


In some states, if a party against whom enforcement of an oral contract sought admits in pleading, testimony, or otherwise in court precedings that a contract for sale was made, the contract will be enforceable.

Promissory Estoppel (Statute of Frauds)

If the reliance was foreseeable to the person making the promise and if injustice can be avoided by enforcing the promise, then an oral contact can be upheld.

Written memorandum (written evidence of the oral contract)

signed by the party against whom enforcement is sought will also satisfy the writing requirement.

A writing

can consist of any confirmation, invoice, sales slip, check, fax, or email - or such items in combination. It must name the parties and identify the subject matter, consideration, and quantity.

Parole Evidence Rule

A substantive rule of contracts, as well as a procedural rule of evidence, under which a court will not receive into evidence the parties' prior negotiations, prior agreements , or contemporaneous oral agreements if that evidence contradicts or varies the terms of the parties' written contract.

Integrated Contract

A written contract that constitutes the final expression of the parties' agreement. If a contract is integrated, evidence extraneous to the contract that contradicts or alters the meaning of the contract in any way is inadmissible.

Completely integrated contract

The contract contains all of the terms of the parties' agreement

Partially integrated contract

Contains on ly some of the terms that the parties' agreed on and not others.

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