Chapter 8: Misrepresentation, Mistake, Duress and Undue Influence

Question 1

misrepresentation

Answer 1

an untrue statement which induces a party to enter the contract
- failure to volunteer information is generally not misrepresentation

Question 2

Voidable contract

Answer 2

A contract exists but the innocent party may refuse to perform it

Question 3

Liability for failure to disclose information may arise:

Answer 3

1. Half truths - true but misleading because it is incomplete
2. If circumstances change between making the statement and acceptance
3. Fiduciary relationship exists between the parties

Question 4

Fiduciary relationship

Answer 4

a legal relationship with a very high degree of trust (doctor/patient)

Question 5

Remedies for Misrepresentation 3 categories

Answer 5

1. fraudulently
2. carelessly
3. wholly innocent

Question 6

Fraudulently

Answer 6

Fraudulent if the misrepresentor knows that the statement is untrue, or makes the statement recklessly, not caring whether it is true or false
- rescission

Question 7

Carelessly

Answer 7

Untrue statement made without reasonable belief in its truth

- may be liable in damages, rescission may be granted

Question 8

Wholly Innocent

Answer 8

If a misrepresentation is made in good faith, with no intention to deceive and without carelessness, the contract is rendered voidable
Rescission is the usual remedy

Question 9

Rescission

Answer 9

Seeks to return the parties to their pre-contractual position

Question 10

mistake kinds

Answer 10

operative, common, mutual, and unliateral

Question 11

operative mistake

Answer 11

A mistake will be so fundamental that the contract will be rendered void, such a mistake is said in law to be operative because it strikes at the root of the contract effectively preventing any true agreement

If a contract is found to be void for operative mistake the court will require any money or property which has changed hands to be returned: as no contract exists in law, title does not pass

Question 12

common mistake

Answer 12

both parties make the same mistake

Question 13

mutual mistake

Answer 13

both parties each make a different mistake

Question 14

Unilateral mistake

Answer 14

one contracting party is mistaken

Question 15

Documents signed by mistake need to prove that: (2)

Answer 15

1. The document signed is radically different in its effect from what they believed they were signing
2. The signers were not careless

Question 16

Duress

Answer 16

physical threat to force a party to enter a contract

Question 17

Contract is voidable considering the following under duress

Answer 17

T1. he extent of thee pressure employed

2. The level of protest
3. Whether the aggrieved party had any real choice about complying with the other party’s threats
4. Whether independent advice was available to the aggrieved party

Question 18

undue influence

Answer 18

one party abuses his or her personal influence or authority over another to make that party enter a transaction.

Question 19

Fiduciary relationships that exist automatically in law:

Answer 19

Doctor and patient
Solicitor and client
Principal and agent