Professional Documents
Culture Documents
Spring 2009
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Vitiating factors is the technical term
for the things which make a contract
void or voidable
These things are:
Mistake
Misrepresentation
Duress
Undue influence
Public policy
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Terms are part of the contract
Breach of term is a breach of contract,
allowing the remedies for breach of
contract
Representations (other statements)
are not
Misrepresentations don’t allow remedies
for breach of contract
They make the contract voidable
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Oral statement/ written contract - a
representation
Oral contract
Strong statements are likely to be terms
Weak statements are likely to be
representations
Important statements are likely terms
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A misrepresentation is a false
statement which persuades
someone to enter into a contract
The contract is then voidable
Misrepresentation has 3 parts
A statement
About a fact
Which causes the party to enter into the
contract
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Opinions are not facts
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Thereare 3 types of
misrepresentation
Fraudulent misrepresentation
Negligent misrepresentation
Innocent misrepresentation
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A person intentionally makes a
false statement
Fraudulent misrepresentation
involves a statement by one
party:
That they know is untrue;
That they don’t believe is true; or
That they recklessly disregard
whether it’s true or not
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Rescission and damages for the
tort of deceit
Must bring an action within a
reasonable time after discovering
the misrepresentation
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A person makes a statement they
believe to be true, but they have no
reasonable basis for believing it to
be true
Remedies are rescission and
damages
Action
must be brought within a
reasonable time after the
misrepresentation is made
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A person makes a statement believing it to
be true, and has good reasons for
believing that
This could be because the seller had been
persuaded to make a contract by the same
misrepresentation
Remedies for innocent misrepresentation
are simply rescission
BUT, under the Misrepresentation Act of
1967, courts may apply contract damages
if rescission would be unfair
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A party may lose its right to rescind
a contract for misrepresentation if:
The contract is affirmed
A third party acquires rights
The subject matter of the contract no
longer exists
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There are 3 kinds of mistake:
Common mistake
Mutual mistake
Unilateral mistake
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Thisis where both parties to the
contract share the same mistake
about the circumstances
surrounding the agreement
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Common mistakes are:
Mistake as to the existence of
goods
Mistakes as to quality
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This mistake occurs when the
subject of the contract no longer exists
but the parties don’t know that when
they make the contract
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Courtsare unwilling to make a
contract void because of a mistake
about the quality of the subject of
the contract
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Cross purposes
Mistakes as to terms
Mistakes as to the identity of a
person
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A mutual misunderstanding
Two parties have different views
about the same situation
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One party is mistaken about some
important fact relating to the
contract, and the other party
knows that
These contracts will be void
unless the mistake is one of
quality
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This
is where one party is making a
mistake about the identity of the
other party
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Many cases of unilateral mistake also
involve misrepresentation
However,it is important to decide
whether unilateral mistake is
involved
Thisis because unilateral mistake
makes the contract void,
void but
misrepresentation only makes the
contract voidable
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Contracts made under duress are
voidable
Duress
Physical threat
Economic threat
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A party with a particular position of
power or authority makes a contract
with another
Doctor-patient
Lawyer-client
Courtpresumes undue influence
occurred unless the dominant party
proves otherwise
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Undue influence may occur outside
of the previous relationships
Person alleging undue influence
must prove that it occurred
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