C5: Vitiating Factors Flashcards
What is the general rule of The legal capacity to contract?
The general is that all natural persons of the age of majority and of sound mind have unlimited capacity to enter into any lawful contract.
Artificial Persons means who?
Corporations created under the law
humans are regarded natural persons
What are the two special rules when it comes to contracting minors?
a) To prevent adults from taking advantage of the inexperience and immaturity of a minor
b) Protect an adult “acting in good faith” from taken advantaged of from a minor
The two English Law Act statutes when relevant to contracting minors are
Infant Relief Act and
Minor’s Contract Act
What are the two contracts enforceable against a minor?
a) Contracts for the Supply of “Necessaries”
(related to the sales of goods act; goods and services contract are binding to minor)
b) Beneficial Contracts for Education and Training
(e. g. apprenticeship, work attachments)
(All other contracts cannot enforce unless ratify by minor.)
the two Remedies under common law and statute when contracting minor are
- Under the law of Restitution, if the minor acted fraudulently and obtained money or property from an adult under a contract, the adult can take back the “actual property or money in the minor’s possession.
- Under the Minor’s Contract Act, the court may order the minor to return the property acquired under an unenforceable contract or one that was repudiated. (only if the court think its equitable)
IMPT
Misrepresentation
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Whats the diff between “terms of contract” and “representations”?
The terms are statements that form part of the contract. (sue for breach of contract)
Other statements made during negotiations before forming contract are “representations” (sue for misrep)
IMPT
Misrepresentation
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What is the def of misrep?
A Misrepresentation is an untrue statement of fact made by one party to a contract to the other, at or before the time the contract was made, which induces the other party to enter into the contract.
IMPT
Misrepresentation
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The 5 elements of misrep are:
- Statement concerning some fact
- Statement is false
- One party misleads other
- Before or during contracting
- The (mis)representation made must have induced the other party to enter the contract.
IMPT Misrepresentation - Can silence amount to misrep? and 3 Situations where failure to disclose info will kena are:
Silence does not amount to Misrep.
a) when there is good faith r/s between the parties
(like partnerships, doc-patient)
b) Contract is “utmost good faith” which requires party to disclose all material facts
c) Failure to disclose info distorts the truth
(e.g. when only say half-truths)
IMPT
Misrepresentation
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The 3 types of Misrep are:
- Fraudulent Misrep - statement maker knows what they say is false will be liable for fraud. Injured party can then rescind contract and sue for damages
- Negligent Misrep - statement maker has no reasonable grounds for believing the false statement to be true, liable for ^. Judge may award rescission and damages.
- Innocent Misrep - statement maker had reasonable grounds to believe false statement was true before or when contract was entered into, liable for ^. Court may award damages in discretion.
IMPT
Misrepresentation
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Court can refuse to award rescission when:
a) Injured party received some benefit under the contract/some way affirmed it. e.g. A long delay in taking legal actions is evidence of formation.
b) Where the parties cannot be restored to their of positions e.g. bc goods destroyed/sold to third party
IMPT
Misrepresentation
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What is Rescission?
A Rescission is a legal remedy which aims to restore the parties to the pre-contractual positions
(like go back to how it was before contract was made)
