Английский язык для юристов. Предпринимательское право - стр. 18
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.
A fiduciary relationship is a relationship based upon trust. Such a relationship exists between attorneys and clients, guardians and wards, trustees and beneficiaries, and directors and a corporation. If one party is in a fiduciary relationship with another party, then an obligation arises to reveal what otherwise might be withheld when the two parties enter an agreement.
A false statement made innocently with no intent to deceive is called misrepresentation. Innocent misrepresentation makes an existing agreement voidable, and the complaining party may demand rescission. Rescission means that both parties are returned to their original positions before the contract was entered into. Unlike cases based on fraud, which allow rescission and damages, cases based on innocent misrepresentation allow only rescission and not money damages.
When there has been no real meeting of the minds because of a mistake, mutual assent was never achieved and the agreement may be rescinded. As in misrepresentation, mistake