Genuineness of Assent
Chapter 5
Contract Law for Paralegals: Traditional and E-Contracts
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Assent



Voluntary assent by the parties is necessary
to create an enforceable contract.
Assent is determined by the relevant facts
surrounding the negotiation and formation of
the contract.
Assent may be manifested in any manner
sufficient to show agreement, including
express words or conduct of the parties.
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Genuineness of Assent


Contracts are unenforceable if parties
have actually consented to the contract
but their assent is not genuine.
If a party’s assent to a contract is not
genuine, the courts will permit the
innocent party to avoid the contract.
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Genuineness of Assent

(continued)
Genuineness of assent is an issue in
the areas of:

Mistake

Misrepresentation

Duress

Undue Influence
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Mistakes


A mistake occurs where one or both of
the parties have an erroneous belief
about the subject matter, value, or
some other aspect of the contract.
Mistakes may be either:


Unilateral
Mutual
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Rescission


An action to undo the contract.
The law permits rescission of some
contracts made in mistake.
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Unilateral Mistake



When one party is mistaken about a
material fact regarding the subject
matter of the contract.
Generally, the mistaken party will not be
permitted to rescind the contract.
The contract will be enforced on its
terms.
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There are three types of situations where
the contract may not be enforced:
1. One party makes a unilateral mistake of fact
and the other party knew (or should have
known) that a mistake was made.
2. A unilateral mistake occurs because of a
clerical or mathematical error that is not the
result of gross negligence.
3. The mistake is so serious that enforcing the
contract would be unconscionable.
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Mutual Mistakes

Mutual Mistake of Fact


A mistake made by both parties concerning
a material fact that is important to the
subject matter of the contract.
The contract may be rescinded on the
ground that no contract has been formed
because there has been no “meeting of the
minds” between the parties.
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Mutual Mistakes

(continued)
Mutual Mistake of Value


A mistake that occurs if both parties know
the object of the contract, but are mistake
as to its value.
The contract remains enforceable by either
party because the identity of the subject
matter of the contract is not at issue.
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Fraudulent Misrepresentation
Misrepresentation

An assertion is made
that is not in accord
with the facts.
Intentional
Misrepresentation


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Occurs when one person
consciously decides to
induce another person
to rely on a
misrepresentation.
Also called fraud.
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Fraudulent Misrepresentation
(continued)

When a fraudulent misrepresentation is
used to induce another to enter into a
contract:


The innocent party’s assent to the contract
is not genuine; and
The contract is voidable by the innocent
party.
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To prove fraud, the following elements
must be shown:
1. The wrongdoer made a false
representation of material fact.
2. The wrongdoer intended to deceive
the innocent party.
3. The innocent party justifiably relied on
the misrepresentation.
4. The innocent party was injured.
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Types of Fraud:
 Fraud in the Inception
 Fraud in the Inducement
 Fraud by Concealment
 Silence as Misrepresentation
 Misrepresentation of Law
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Innocent Misrepresentation



Occurs when a person makes a
statement of fact that he or she
honestly and reasonably believes to be
true, even though it is not.
Innocent misrepresentation is not fraud.
The aggrieved party may rescind the
contract but may not sue for damages.
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Concept Summary: Types of Misrepresentation
Legal Consequences – Innocent Party May:
Type of
Misrepresentation
Sue for Damages Rescind Contract
Fraud in the inception
Yes
Yes
Fraud in the inducement
Yes
Yes
Fraud by concealment
Yes
Yes
Silence as
misrepresentation
Yes
Yes
Misrepresentation of law Usually no
Usually no
Innocent
misrepresentation
Yes
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No
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Duress

Occurs where one party threatens to do
a wrongful act unless the other party
enters into a contract.


The assent is not voluntary if one party has
been forced into making the contract.
Such contracts are not enforceable against
the innocent party.
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Economic Duress

Occurs when when one party to a
contract refuses to perform his or her
contractual duties unless the other
party:



Pays an increased price,
Enters into a second contract with the
threatening party, or
Undertakes a similar action.
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Undue Influence

Occurs where one person:



Takes advantage of another person’s
mental, emotional, or physical weakness,
and
Unduly persuades that person to enter into
a contract.
A contract entered into because of
undue influence is voidable by the
innocent party.
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Undue Influence
(continued)
The following elements must be shown to
prove undue influence:
1. A fiduciary or confidential relationship must
have existed between the parties.
2. The dominant party must have unduly used
his or her influence to persuade the servient
party to enter into a contract.
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