Genuine Agreement Chapter 8 in the business law text “Meeting of the Minds” Offeror and offeree must both agree on the contractual terms. If there is no “meeting of the minds” there is no contract Mistake unilateral mistake bilateral, or mutual, mistake Unilateral Mistake an error on the part of one of the parties to the contract This ordinarily does not make the contract voidable. Types of unilateral mistake – as to the nature of the agreement – as to the identity of a party Bilateral Mistake an error on the part of both (or all) of the parties to the contract This makes the contract voidable by either party. Types of bilateral mistake – as to the possibility of performance – as to the subject matter Fraud (deceit) deliberate deception to secure an unfair or unlawful gain Persons induced into a contract by fraud have a choice. – rescind, or cancel the contract – sue for monetary damages Fraud - the five elements false representation of fact party making the representation must know it’s false representation made with the intent it be relied upon reasonable reliance by innocent party on the representation monetary loss Innocent Misrepresentation representation which turns out to be false but which was believed to be true at the time it was made The other party may rescind the contract but may not sue for monetary damages. Duress overcoming a person’s will be use of force or by threat of force or bodily harm If actual force is used, the contract is void. If the threat of force is used, the contract is voidable by the innocent party. – The threat may be to the innocent party or to a family member. Undue Influence unfair and improper persuasive pressure exercised by one person in a relationship of trust with another person The contract is voidable by the innocent party.