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While known false representation of the quality or defects of an article made by either seller or buyer, for the purpose of gaining the advantage in a transaction is fraudulent, the purchaser, however, is not obliged to disclose his knowledge of the real value of an article, which is offered to him below its actual value.

On questions which may be considered matters of opinion rather than questions of fact, misrepresentations do not constitute fraud; only misrepresentations of known facts fall in this category. What is not really known may be misrepresented without invalidating the contract. Neither do false representations of future intention, or of questions of law, constitute fraud.

The fraudulent misrepresentation must have been made by the party charged or by his agent, or with his connivance and knowledge. The fraud of a third person does not invalidate the contract between two others.

The misrepresentation must be known to be false. Sometimes a contract may be set aside because of violent injustice resulting from a false representation, which was, however, believed to be true. Frequently, however, a party may make extravagant statements in a reckless manner for the purpose of influencing the other party to a transaction, not knowing whether his statements be true or not. In such a case the willful negligence or recklessness as to the truth of his positive statements will act to invalidate the contract, provided such statements prove to be false, the same as though he had known them to be false.

The false statements must also be made with the expectation that they are to be believed and acted upon. Extravagant affirmations made in a jocular manner, and not expected to be believed, would not constitute fraud.

The misrepresentation must be accepted as true, and be acted upon before the fraud is perfected. The burden of proof

here lies upon the party charging fraud, to show that he did really act upon the statements made. It is not necessary that he shall show that the fraudulent statements formed the sole basis of his action. He need only show that they contributed materially to that end, and that the action would not have been consummated without them.

A false representation as to one of several material matters in a contract operates to vitiate the entire agreement.

The party claiming fraud must also show that some actual damage has been suffered. It would not be sufficient cause for the annulling of a contract to show that one was fraudulently led to the payment of a just debt, since no damage has in this case been sustained.

21. Remedy of party defrauded. Immediately on discovering the fraud the party defrauded should take action, and he has his option of the following courses, the last two being remedies.

(a) He may enforce the contract against the defrauding party, or take no action whatever, and allow the contract to be enforced against himself. If he does not take action on discovery of the fraud, he will be supposed to have consented to the enforcement of the contract, notwithstanding such fraud, and he will lose his option of resisting such enforcement.

(b) He may at once give notice of the rescission or rescinding of the contract on his part, because of fraud claimed to have been perpetrated by the other party, and he may bring suit to recover damages, or he may either by word or act give evidence to the other party of his intention to treat the contract as null and void.

(c) If it be practicable to reinstate the parties in their original relative relations, he may sue for such restoration. That is to say, if goods have been delivered, they may be recovered if practicable.

Any action under the contract in the way of acknowledging its force by the party defrauded, after he has discovered the fraud, will operate to make the contract binding upon him, as he will be assumed to have deliberately forfeited his right of rescission. It must be understood, also, that he can not consent to the operation of a portion of the contract with the privilege of rejecting another portion of it to which the fraud may more directly relate. Since fraud vitiates the entire contract, the defrauded party must forfeit his privilege of rejection entirely by agreeing to its terms notwithstanding the fraud, or he must reject it entirely and in all its parts. He can not obtain the benefit of a part and reject another part.

Outside of the rights described above, arising under the contract itself, the defrauded party has the privilege at common law of bringing action for deceit to cover such damage as he may have sustained as a result of such fraudulent misrepresentation.

This action is in addition to his privilege of avoiding

or rescinding the contract itself.

Furthermore a party defrauded of his property may recapture it, if he is able to do so without unnecessary violence and without a breach of the peace, without recourse to the law and its agencies.

22. Invalidity of Contract through Duress, "A person is said to have acted under duress when he does or promises to do any act not of his own free will, but in consequence of unlawful physical restraint imposed by another, or in consequence of threats made by another, either to do him some great bodily harm, or to unlawfully destroy his property, or deprive him of the same. Promises made under duress will not be enforced, and money paid, or property transferred under duress may be recovered."

Contracts entered into under duress as above defined are voidable at the option of the constrained party, the same as

though fraud had been perpetrated upon him.

The contract is

not voidable, however, at the option of the other party.

23. Invalidity of Contract through Undue Influence. Where the parties occupy a confidential relation to each other, or from long association and other peculiar circumstances affording the proper and sufficient opportunities, courts of equity take cognizance of what may be called undue influence, which may act the same as fraud in persuading the person to enter into an unfair and unreasonable contract. Such are the relations of the members of one family, or those of guardian and ward, attorney and client, priest and parishioner, physician and patient, as well as those where mental weakness from old age or sickness and the like, furnish suitable opportunities.

The remedies in the case of undue influence are the same as those in the case of fraud, except that the influenced party does not lose his rights of choice of remedies by delay in action, since it is unfair to assume that such a party can suddenly recover his normal independence.

24.

CONSIDERATION.

Consideration Defined.

All business contracts

such as an engineer will be called upon to enforce must always be supported by a valuable consideration; otherwise they are not enforceable. As such a consideration is always named and specifically determined in all engineering contracts, it is not necessary to go into that subject here very fully.

A "valuable consideration" in the eyes of the law is "some right, interest, profit, or benefit, accruing to one party, or some forbearance, detriment, loss, or responsibility given, suffered, or undertaken by the other."

Such a consideration is necessary to enforce a written agreement the same as would be necessary with an oral agreement.

A contract under seal, however, does not require a consideration to enforce it. This is the principal and characteristic difference between contracts under seal, and ordinary written or oral contracts, both of which latter class constitute what is known as simple or parole agreements.

It is not necessary that the consideration be named in the agreement, or that the fact of consideration should appear in the agreement; it is only necessary that there shall be a consideration in fact.

In cases of promissory notes and other negotiable paper, the presumption is that there was in fact a consideration, whether named in the document or not, and the burden of proof rests upon the maker of the note to show that there was in fact no consideration.

In the states of California, Iowa, Indiana, Kansas, Kentucky and Missouri, an agreement made in writing is presumed by statute law to be founded on a consideration, and is therefore placed on the same basis as holds generally for negotiable paper. Here again the burden of proof rests upon the defendant to show that there was in fact no consideration. both the above cases if it can be shown that the promise was not supported by what the law will construe as a valuable consideration, the agreement or contract fails.

In

A promise made without a valuable consideration is construed by the law to be gratuitous, and not enforceable, even though the party to whom it was made has acted upon it, and has sustained serious loss or damage thereby.

25. Adequacy of Consideration. It is not necessary that the consideration named, or implied, or shown to exist by any acceptable evidence shall be adequate to support

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