7 - Vitiating factors

Question 1

Vitiating factors

Answer 1

factors that invalidate a contract, making it null or void

Question 2

misrepresentation

Answer 2

If a party is encouraged into entering a contract because of a factual statement that later turns out to be untrue, then this misrepresentation may provide a remedy for the injured party

Question 3

Intrepreneur Estates Ltd v Holland 2000

Answer 3

example of a clear misrepresentation

Question 4

what must a misrepresentation be

Answer 4

false statment of material fact cant be -
* a mere opinion
* an expression of future intent
* a mere trade puff

Question 5

Bissett v Wilkinson 1927

Answer 5

– a statement was made without expert knowledge and was therefore a mere opinion

mere opinion

Question 6

how may misrepresentation arise

Answer 6

conduct
verbal or written statment
not from silence

Question 7

Fraudulent misrepresentation

Answer 7

A statement made knowingly, or being reckless as to whether it is true or not

Question 8

Derry v Peek

Answer 8

the statement was careless but honestly made

Question 9

Negligent misrepresentation

Answer 9

can be actioned at common law where the loss if financial
Liability will occur where there is a special relationship and the party making the representation owes a duty of care as per Hedley Bryne 1963
s2(1) Misrepresentation Act 1967 allows legal action where a misrepresentation is made and a loss occurs as a result of replying on the misrepresentation

Question 10

Innocent misrepresentation

Answer 10

Damages to compensate the injured party are available if the other party makes an innocent misrepresentation which turns out to be false – s2(2)

Question 11

what dose remied of misrepresentation depend on

Answer 11

the type of misrepresenation

Question 12

remedies for fraudulent misrepresentation

Answer 12

The injured party can sue in the tort of deceit
The injured party is entitled to reparation for “all damage flowing from the fraudulent inducement” -
A loss of profit can be claimed
The injured party can still affirm the contract or disaffirm the contract

Question 13

remedies for Negligent misrepresentation

Answer 13

Damages are available under the 1967 Act and Common Law
Common law damages are based on foreseeable loss under tort
Contributory negligence can reduce the amount of damages

Question 14

remedies for inncoent misrepresentation

Answer 14

There is no automatic or absolute right to damages
There is a discretionary right to damages
Recession is possible

Question 15

ecenomic duress

Answer 15

where one party makes threats of an economic nature to the other party in order to form or change an agreement
A contract agreed under economic duress cannot be recognised as a true agreement

Question 16

The Siboen and the Sibotre 1976

Answer 16

a degree of coercison that the other party was deprived of free consent and agreement

Question 17

the rules of ecenomic duress

Answer 17

• Courts will take into account whether the injured party protested whether there was an alternative route available or if they took steps to avoid
• Threats by a union to blacklist a ship were decided to be economic duress
• A threat to a small firm by a larger firm that they were in breach of contract can be ecomoic duress -
• No economic duress in Williams v Roffey 1991 – as the builders had made a reasonable choice

Question 18

the universal sentiniel 1983

Answer 18

ecenomic duress can also include pressure from trade unions or federations

Question 19

spice girls ltd v aprilia world service Bv 2000

Answer 19

The group signed a contract to promote scooters without telling the manufacturer that one of the Spice Girls was leaving the group

Question 20

remedies for ecenomic duress

Answer 20

• The effect of economic duress is to void a contract
• An injured party will therefore be entitled to have the contract put aside
• The injured party must seek rescission as soon as possible after the original economic duress has stopped
• As economic duress is similar to the tort of intimidation a remedy for damages would lie in tort