Full Answer Section

1. Duress:
   • Requirements: One party is forced into a contract by wrongful or unlawful pressure or threats.
   • Examples:
     • Someone is threatened with physical harm unless they sign a contract.
     • Economic duress, where one party uses their superior bargaining power to coerce the other.
2. Undue Influence:
   • Requirements: One party takes advantage of a confidential relationship or a position of power to persuade the other party to enter a contract.
   • Examples:
     • A caregiver persuades an elderly person to sign a contract that benefits the caregiver.
     • An attorney pressures a client to enter a contract that favors the attorney.
3. Misrepresentation:
   • Requirements: A false statement of material fact is made, inducing the other party to enter the contract.
   • Types:
     • Innocent Misrepresentation: Unintentional false statement.
     • Negligent Misrepresentation: False statement made without reasonable care.
     • Fraudulent Misrepresentation: Intentional false statement made with knowledge of its falsity and intent to deceive.
   • Examples:
     • A seller states that a property has no termite damage, but it does (innocent).
     • A seller states that a property has no termite damage, without checking for termite damage (negligent).
     • A seller knows a property has termite damage, but states that it does not, to make a sale (fraudulent).
4. Mistake:
   • Requirements:
     • Mutual Mistake: Both parties are mistaken about a fundamental fact of the contract.
     • Unilateral Mistake: One party is mistaken, and the other party knew or should have known of the mistake.
   • Examples:
     • Both parties believe they are buying and selling a specific piece of land, but they are mistaken about its location (mutual).
     • One party believes they are buying a rare painting, but it’s a copy, and the seller knows this (unilateral).
5. Illegality:
   • Requirements: The subject matter or purpose of the contract is illegal.
   • Examples:
     • A contract to sell illegal drugs.
     • A contract that violates a licensing requirement.
6. Unconscionability:
   • Requirements: The contract is so unfair or oppressive that it shocks the conscience of the court.
   • Examples:
     • A contract with extremely one-sided terms and no bargaining power for the weaker party.
     • A contract that is so complex that the weaker party could not understand it.

Sly Salesperson Analysis

• “Best car around. It’s a great car and sips gas.”
  • This is likely considered “puffery” or sales talk. These are general statements of opinion, not statements of fact.
  • A reasonable person would not rely on such vague statements as a basis for entering a contract.
  • Therefore, this likely does not constitute misrepresentation or fraud.
• “The car gets 40 miles per gallon, but in fact the car only gets 30 miles per gallon.”
  • This is a specific, measurable statement of fact.
  • If the buyer relied on this statement when deciding to purchase the car, it could constitute misrepresentation.
  • If Sly Salesperson knew the car only got 30 mpg and intentionally stated 40 mpg to deceive the buyer, it would be fraudulent misrepresentation.
  • The fact that the statement is a specific number, greatly increases the liability of the sales person.
  • The difference between the two statements is the level of specificity. The first statement is an opinion, while the second is a statement of fact.