– concealment – сокрытие, укрывательство; утаивание, умалчивание
– duress – принуждение
– fiduciary relationship – фидуциарные отношения
– fraud – обман; мошенничество
– liable – подлежащий ответственности
– material fact – существенный факт
– misrepresentation – введение в заблуждение; искажение фактов
– mutual assent – обоюдное согласие, совпадение намерений сторон
– nondisclosure – неоглашение, нераскрытие
– rescission – аннулирование, расторжение, прекращение
– undue influence – злоупотребление влиянием; недолжное влияние
Each party to a contract is protected from the chicanery of the other or from certain mistakes that may have crept into their agreement and destroyed mutual assent. If mutual assent has been destroyed, the contract is said to be a defective agreement, and that party is no longer bound to the terms of the agreement. A defective agreement can arise as a result of fraud, misrepresentation, mutual mistake, duress, or undue influence.
A wrongful statement, action, or concealment pertinent to the subject matter of a contract knowingly made to damage the other party defines fraud. If proved, fraud destroys any contract and makes the wrongdoer liable (i.e., legally responsible) to the injured party for all losses that result.
To destroy mutual assent on a claim of active or passive fraud, the complaining, or innocent, party must prove the existence of five elements:
1. The complaining party has to show that the other party made a false representation about some material fact (i.e., an important fact, a fact of substance) involved in the contract. A material fact is very crucial to the terms of the contract.
2. It must be demonstrated that the other party made the representation knowing of its falsity.
3. It must be revealed that the false representation was intended to be relied upon by the innocent party.
4. The complaining party must demonstrate that there was a reasonable reliance on the false representation.
5. It must be shown that the innocent party actually suffered some loss by relying on the false representation after entering the contract.
When one party to a contract makes a false statement intended to deceive the other party and thus leads that party into a deceptively based agreement, active fraud occurs.
To be fraudulent, statements must involve facts.
In contrast, passive fraud, which is generally called concealment or nondisclosure, occurs when one party does not offer certain facts that he or she is under an obligation to reveal. If this passive conduct is intended to deceive and does, in fact, deceive the other party, fraud results.
