1.3 Vitiating Factors

Question 1

What is mutual mistake

Answer 1

Both parties make a mistake but about different matters

Question 2

Unilateral mistake

Answer 2

One mistake made by one party. Mistake as to the terms or identity.

Question 3

The definition of misrepresentation

Answer 3

• false statement during pre-contractual negotiations
• induces the other party to make a contract
• as a result, they suffer loss

Make sure: they actually suffered a loss

Question 4

Voidable means

Answer 4

Something which is capable of being voided at the wish of the party

Question 5

What is the consequence of an actionable misrepresentation?

Answer 5

Renders the contract voidable. This means the innocent party has the option to set it aside if they wish to do so.

Question 6

Common mistake

Answer 6

Both parties make the same mistake around subject matter (its existence, title and quality).

Question 7

Test for misrepresentation

Answer 7

Must be a false statement of fact ie. not an opinion, silence

Question 8

In negligent misrepresentation, what does liability depend on?

Answer 8

Depends on whether there is a “special relationship” between the parties which has given rise to a duty of care ie. doctor

Question 9

Innocent misrepresentation - criteria

Answer 9

Person making the statement believes that it is true and has reasonable grounds for believing
the statement is true.

Question 10

When can the right to rescind a contract for misrepresentation be lost?

Answer 10

• the innocent party affirms the contract
• a lapse of time may be held to be evidence of an intention to affirm, or
• parties cannot be restored to original positions (for example, where the subject matter has changed or third parties have acquired rights).

Question 11

Remedies for misrepresentation

Answer 11

Recession or damages

Question 12

What is the rule with an illegal contract?

Answer 12

An illegal contract (which commits fraud, impedes the administration of justice etc) are unenforceable.

Question 13

If duress or undue influence is found, what is the remedy at the discretion of the court?

Answer 13

duress - contract is voidable as a right
undue influence - contract is voidable at the discretion of the court

Question 14

What is the difference between duress and undue influence?

Answer 14

Both involve the excretion of pressure but with undue influence there is a relationship between the parties that influences the pressure

Question 15

Duress can be to

Answer 15

The person, property or economic duress.

Question 16

Undue influence can be

Answer 16

Actual or presumed (protected relationships or presumption of
influence where a relationship of trust and confidence can be proved).

Question 17

What is notice significant to?

Answer 17

Undue influence
Bank or another similar body will be put on notice. They should seek a private meeting with the spouse (or party) entering the contract.

If they had notice of a potential source of undue influence, contract could be avoided

Question 18

Illegality means there is

Answer 18

No contract

Question 19

Actual undue influence

Answer 19

There needs to be a relationship of trust and confidence.

Question 20

presumed undue influence (protected relationships)

Answer 20

Protected relationships. Examples: solicitor/client, doctor/patient and religious adviser/disciple, as
well as special relationships such as parent/child.

Not: spouses, civil partners

Question 21

Presumed Undue Influence (Other Relationships)

Answer 21

A relationship of trust and confidence must be proven before a presumption of undue influence arises.

Includes relationships not automatically protected, such as spouses and partners.

The presumption can be rebutted with evidence that the influenced party acted independently.