Genuineness of Assent

A party who demonstrates that he or she did not genuinely assent to the terms of a contract may avoid the contract. Genuine assent may be lacking due to mistake, fraudulent misrepresentation, undue influence, or duress. As was true with contracts entered into by persons lacking contractual capacity, contracts lacking genuine assent are voidable, not void.

Mistake: The parties entered into a contract with different understandings of one or more material fact(s) relating to the subject matter of the contract.

Unilateral Mistake: A mistake made by one of the contracting parties. Generally, a unilateral mistake will not excuse performance of the contract unless: the other party to the contract knew or should have known of the mistake; or the mistake is one of mathematics only.

Mutual Mistake of Fact: A mistake on the part of both contracting parties as to some material fact. In this case, either party may rescind.

Mutual Mistake of Value: If, however, the mutual mistake concerns the future market value or some quality of the object of the contract, the contract can normally be enforced by either party.

FRAUDULENT MISREPRESENTATION

When an innocent party consents to a contract with fraudulent terms, he or she may usually avoid the contract, because he or she did not genuinely assent to the fraudulent terms.

Elements of Fraudulent Misrepresentation: A misrepresentation of material fact was made, with the intent to deceive, on which the innocent party justifiably relied resulting in injury to the innocent party. Most courts do not require proof of an injury to the innocent party if the only remedy sought by the innocent party is rescission of the contract – that is, returning the parties to their pre-contractual positions. However, in order to recover damages, it is universally held that the innocent party must prove injury as a result of the misrepresentation.

TYPES OF MISREPRESENTATIONS

Predictions and Expressions of Opinion: Generally, these will not give...