Write 3 Paragraphs For Your Response: What do you think about the Statute of Frauds? What contracts must be in writing? What happens when there is a mistake? Are you able to understand the various policy reasons behind some the contract laws? Although fraud is a tort, the presence of fraud also affects the authenticity of the innocent party's consent to a contract. When an innocent party is fraudulently induced to enter into a contract, the contract usually can be avoided because that party has not voluntarily consented to the terms. Normally, the innocent party can either rescind the contract and be restored to her or his original position or enforce the contract and seek damages for any harms resulting from the fraud. Generally, fraudulent misrepresentation refers only to misrepresentation that is consciously false and is intended to mislead another. That is, the person making a fraudulent misrepre- sentation knows or believes that the assertion is false or knows that she or he does not have a basis (stated or implied) for the assertion. Typically, fraud involves three elements: 1. A misrepresentation of a material fact must occur. 2. There must be an intent to deceive 3. The innocent party must justifiably rely on the misrepresentation. Additionally, to collect damages, a party must have been harmed as a result of the misrepresentation Misrepresentation Has Occurred The first element of proving fraud is to show that mis- representation of a material fact has occurred. This misrepresentation can occur by words or actions. For instance, an art gallery owner's statement "This painting is a Picasso" is a misrep- resentation of fact if the painting was done by another artist. Similarly, if a customer asks to see only Jasper Johns paintings and the owner immediately leads the customer over to paintings that were not done by Johns, the owner's actions can be a misrepresentation, Exhibit 9-2 Mistakes of Fact BILATERAL MISTAKE Both parties mistaken CONTRACT CAN BE RESCINDED BY EITHER PARTY MATERIAL MISTAKE OF FACT UNILATERAL MISTAKE One party mistaken CONTRACT ENFORCEABLE UNLESS- Other party knew or should have known that mistake was made or Mistake was due to substantial mathematical error, made inadvertently and without gross negligence