section opener / closer: insert book cover art mistake, duress, and undue influence section 6.2

SECTION OPENER / CLOSER:INSERT BOOK COVER ART

Mistake, Duress, and Undue InfluenceMistake, Duress, and Undue InfluenceSection 6.2Section 6.2

Understanding Business and Personal Law

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

Section 6.2Section 6.2

Genuine Agreement

What You’ll Learn

How to distinguish between unilateral How to distinguish between unilateral and bilateral mistakes and bilateral mistakes (pp. 133 and 135)(pp. 133 and 135)

How to recognize the types of mistakes How to recognize the types of mistakes that will allow rescission of a contract that will allow rescission of a contract (p. 134)(p. 134)




Genuine Agreement

What You’ll Learn

How to recognize the requirements of How to recognize the requirements of economic duress (p. 137)economic duress (p. 137)

How to recognize the requirements of How to recognize the requirements of undue influence (p. 138)undue influence (p. 138)




Genuine Agreement

Why It’s Important

Recognizing how mistake, duress, and Recognizing how mistake, duress, and undue influence can affect agreements will undue influence can affect agreements will help you make better decisions in such help you make better decisions in such situations.situations.




Genuine Agreement

Legal Terms

unilateral mistake (p. 133)unilateral mistake (p. 133)bilateral mistake (p. 135)bilateral mistake (p. 135)duress (p. 137)duress (p. 137)economic duress (p. 137)economic duress (p. 137)undue influence (p. 138)undue influence (p. 138)




Genuine Agreement

Mistake Unilateral MistakeBilateral Mistake

Section OutlineSection Outline

Duress

Undue Influence




Genuine Agreement

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.

Genuine Agreement Genuine Agreement




Genuine Agreement

Pre-Learning Question Pre-Learning Question

How can a mistake disrupt an agreement?




Genuine Agreement

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.




Genuine Agreement

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.




Genuine Agreement


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.




Genuine Agreement


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 agreement.agreement.

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




Genuine Agreement

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.




Genuine Agreement

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.




Genuine Agreement

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.




Genuine Agreement

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 party.identity 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 party.identity 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




Genuine Agreement

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.




Genuine Agreement

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 performance.performance.

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




Genuine Agreement

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.




Genuine Agreement

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




Genuine Agreement

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




Genuine Agreement

ANSWERANSWER

False




Genuine Agreement


What do you think duress is?




Genuine Agreement

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.




Genuine Agreement

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.




Genuine Agreement

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.




Genuine Agreement


What do you think undue influence is?




Genuine Agreement

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.




Genuine Agreement

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.




Genuine Agreement

6.26.2

Elements of Undue Influence Elements of Undue Influence

A dependencyA dependencyrelationship relationship

A dependencyA dependencyrelationship relationship

DescriptionDescriptionDescriptionDescription

One party in a One party in a relationship is relationship is dependent on the dependent on the other party. other party.

One party in a One party in a relationship is relationship is dependent on the dependent on the other party. other party.

ElementElement




Genuine Agreement

6.26.2


Unfair or improperUnfair or improperpressure pressure

Unfair or improperUnfair or improperpressure pressure

DescriptionDescriptionDescriptionDescription

The independent personThe independent personuses excessive pressure uses excessive pressure to force the dependent to force the dependent person to enter a person to enter a contract. contract.

The independent personThe independent personuses excessive pressure uses excessive pressure to force the dependent to force the dependent person to enter a person to enter a contract. contract.

ElementElement




Genuine Agreement

6.26.2


A beneficial contract A beneficial contract A beneficial contract A beneficial contract DescriptionDescriptionDescriptionDescription

The contract benefits The contract benefits the independent party the independent party at the expense of the at the expense of the dependent party. dependent party.

The contract benefits The contract benefits the independent party the independent party at the expense of the at the expense of the dependent party. dependent party.

ElementElement




Genuine Agreement

Reviewing What You Learned

1. What is the difference between unilateral and bilateral mistakes?

Section 6.2 Assessment




Genuine Agreement


Unilateral mistake: only one party is mistaken.Bilateral mistake: both parties are mistaken.


Answer




Genuine Agreement


2. What types of mistake will allow rescission of a contract?





Genuine Agreement


Mistake as to the identity of a party, mistake as to the possibility of performance, and mistake as to the subject matter.


Answer




Genuine Agreement


3. What are the requirements of economic duress?





Genuine Agreement


Economic duress requires threats to a person’s business or income that cause the person to enter a contract without real consent.


Answer




Genuine Agreement


4. What are the requirements of undue influence?





Genuine Agreement


Undue influence requires unfair and improper persuasive pressure exercised by one person in a relationship of trust with another person.


Answer




Genuine Agreement


Critical Thinking ActivityTypes of MistakesWhy is it important to be able to distinguish between unilateral and bilateral mistakes?




Genuine Agreement


Critical Thinking Activity AnswerTypes of MistakesAnswers will vary, but should recognize that understanding the differences between unilateral and bilateral mistakes will help you know your rights and remedies in a contract.




Genuine Agreement


Legal Skills in ActionUndue Influence Suppose that a close friend has sent you an e-mail message saying that she believes her grandfather was tricked into signing over all of his property to his live-in caretaker.




Genuine Agreement


Legal Skills in ActionUndue Influence Your friend asks for your advice. Write an e-mail reply to explain the elements she would have to prove to demonstrate that her grandfather signed over his property because of undue influence.




Genuine Agreement


Legal Skills in Action AnswerUndue Influence To prevail in a claim of undue influence, your friend would need to show that the parties had a relationship of trust, and that the caretaker exercised improper persuasion to take advantage of her grandfather .

SECTION OPENER / CLOSER:INSERT BOOK COVER ART

Mistake, Duress, and Undue InfluenceMistake, Duress, and Undue InfluenceEnd of Section 6.2End of Section 6.2

section opener / closer: insert book cover art mistake, duress, and undue influence section 6.2

Documents