Consent is an important element to a contract. It is required by both parties that are entering into a contract. Consent happens when the parties named in the contract acknowledge that they agree with the terms outlined in the contract. While consent is required for a contact to be binding, there are instances when consent or the lack there of, can cause a contract to be voidable, despite having signatures from both parties on the document. Let’s look at some instances when consent can be voidable.
Fraud occurs when one party has been “deceived” in some way with regards to the details of the contract. For example, a business may have agreed to buy a used delivery truck with 50,000 miles, only to later realize the vehicle has 100,000 miles on it. Through the deception the seller received an unfair gain. In this case, they were able to charge more for the delivery truck than they would have if they had disclosed the actual mileage of the truck. Through the deception, the seller caused harm to the buyer. It also interfered with the buyer being able to give the proper consent to the purchase as the details of the transaction were not transparent.
Despite having a signature on a document that indicates consent, a contract can still be considered “void” if it is shown the contract was agreed to under duress. Duress occurs when threats, violence or other circumstances would make someone engage in a contract against their better judgement. For fans of mafia films this is commonly referred to as the “offer you can’t refuse”. Duress doesn’t have to be as overt as a threat of physical harm but can also be “undue influence” or unfair persuasion. An example of undue influence might be when a patient is convinced by the person caring for them that they should sell personal items of value to them for far less than they are worth. The patient may trust and even like the care taker, but the care taker has taken advantage of their position and their patient’s dependency upon them.
Avoiding Fraud in Contracts
Tell the truth; the whole truth and nothing but the truth… seriously! Transparency in contracts is a must. An honest meeting of the minds cannot take place if all parties are not given full and complete information regarding the subject they are contracting about. Entering into a contract is not the time to withhold information or keep secrets. Rather it is a time for full disclosure, even if some of the information is not favorable. Giving all the information up front will protect a party from future claims. The likelihood someone can claim you sold them a “lemon” of a used car is substantially less if you were clear about the condition of the vehicle upfront and sold it for a fair price.
Avoiding Duress in Contracts
Don’t threaten anyone, ever, to get them to enter into a contract with you. Threats of violence and other such acts will not only make your contract voidable, it could land you in jail!
Avoiding Undue Influence
Don’t take advantage of people who depend on or love you. If you legitimately are wanting to participate in a contract that might lead some to think you are participating in undue influence, make sure and get an attorney involved. Consult with the attorney on the nature of the contract and let them advise you how to execute it in a manner that will reduce the perception of undue influence.
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