Chapter 8 - Factors Contracts Flashcards
Misrepretentation
false statement of fact that persuades someone to enter into a contract
statement must be an allegation of fact or an opinion by an expert
statement must be untrue and must have been the inducement that led to the contract
plaintiff must be misled into doing something they otherwise would not have done
innocent misrep
person making statement honestly believes it to be true
remedies limited to rescission
recsission
puts both parties back into original positions
rescission of contract is not available when:
contract is affirmed
impossible to restore
where a third party is involved
where plaintiff does not have clean hands
fraudulent misrep
false statement was made knowingly
without belief in its truth
recklessly - not caring if t/f
remedies for fraudulent misrep
recsission or damages for deceit
negligent misrep
carelessly providing false info
must establish ABCD
undue influence
pressure from trusted person or position of power to enter contract
more subtle than duress
contract is voidable
court may find undue influence
presumption based on special relationships
presumption based on unique characteristics
determined by facts - must show development of relationship of trust and that trust was abused
unconscionable transactions
permits the court to set aside a contract in which one party has been taken advantage of
agreement must be unreasonable to be unconscionable
must show in unconscionable trans that
bargaining positions of parties are drastically unequal
one party uses position of power to gain advantage
agreement is substantially unfair to weaker party
mistake
error that destroys consensus
reviewable mistakes can relate to
the major terms of the contract
as assumption upon which the contract is based (fact, future event, the law)
expected result or consequence of the agreement
shared mistake
when two parties are in agreement but have made the same mistake regarding some aspect of the contract
must be a fundamental mistake about subject matter of contract
rectification of shared mistake
courts will correct obvious error - if what was written was different from the understanding
misunderstanding
neither party is aware of the other partys misunderstanding about the terms of the agreement
how to correct misunderstanding
reasonable person test for the correct interpretation of the contract
if 2 interpretations are equally reasonable then the contract is void
one sided mistake
occurs where only one of the parties to the contract makes a mistake interpreting contract
caveat emptor
unilateral mistake usually not relieved by the court in the absence of misrep
non est factum
“it is not my act”
mistake goes to the very nature of the document
relief is to rescind contract
pleading negligence often defeats defence of non est factum
rules of interpretation
reasonable person test
literal or liberal meanings imposed on written terms
parol evidence rule
outside evidence will not change clear wording
privity of contract
only affect parties to it
novation
the process of substituting an existing contract with a replacement contract, where the contracting parties reach a consensu
assignment
person entitled to receive a benefit under a contract can transfer that benefit to a third party
obligation cannot be assigned
vicarious performance
vicarious performance
contractual obligation can be performed by others - original party remains responsible for the work
statutory assignment
do not have to sue in assignors name
qualification for statutory assignment
absolute and unconditional assignment
must be in writing and complete
must give proper notice
what cannot be assigned
right to support payments
right to sue another in a tort action - assignment of proceeds of law suit may be assigned
workers compensations benefits
involuntarily assignment of contractual rights are automatic:
death - to the executor/administrator
bankruptcy - to the trustee in bankruptcy
