Welcome to Assignment 3
This assignment covers the final two elements of a valid contract — consideration (something of value exchanged) and legal purpose (the contract cannot be for something illegal). It also introduces genuine assent, which can make an otherwise valid contract voidable if consent was obtained through fraud, mistake, duress, or undue influence.
Exam Alert!
Key exam topics: promissory estoppel, the P&C vs. life insurance premium rule, the 6 elements of fraud, the difference between collusion and concealment, and representations vs. warranties in insurance.
What You Will Learn
1. Types of consideration and exceptions to the consideration requirement
2. How consideration works differently in P&C vs. life insurance
3. Ten types of illegal contracts and how courts handle them
4. The six elements of fraud and remedies available
5. How mistake, duress, and undue influence affect contracts
6. The critical distinction between representations and warranties
Assignment Parts
Consideration
Types of consideration, forbearance, past vs. present, adequacy, promissory estoppel, and P&C vs. life insurance premium rules.
Legal Purpose
Ten types of illegal contracts, exculpatory clauses, noncompetes, insurance illegality, severable contracts, and in pari delicto.
Genuine Assent
The 6 elements of fraud, collusion, concealment, mistake, duress, undue influence, innocent misrepresentation, and representations vs. warranties.
Quick Reference Summary
Consideration
Something of value exchanged. Valuable = enforceable. Good (love/affection) = NOT.
Promissory Estoppel
Enforces promise without consideration when reliance + injustice would result.
P&C vs. Life Premium
P&C: no prepayment needed. Life: first premium required before coverage begins.
6 Elements of Fraud
False representation, material fact, knowingly, intent to deceive, reliance, detriment.
Representations vs. Warranties
Representations = substantially true. Warranties = exactly true. Most states use representations.
Genuine Assent
Absent with: fraud, mistake, duress, undue influence, innocent misrepresentation.