Chapter 9 - Vitiating Factors

Question 1

What are the two factors that invalidate the consent of parties

Answer 1

1. Intention in a defecting way - being threatened, lying
2. The contract itself has a problem - formation or performance goas against the law

Question 2

Difference between a VOID and an avoidable contract?

Answer 2

VOID - a contract never came into being
AVOIDABLE - the non breaching party decides to terminate the contract

Question 3

3 defects of consent are : in civil law

Answer 3

1. Mistake
2. threat
3. fraud

Question 4

In common law what is needed to avoid a contract?

Answer 4

Misrepresentation

Question 5

In civil law: explain to me the 6 requirements to declare a contact avoidable by mistake

Answer 5

1. Creation of an existing contract
2. Casual link between the contract and the party
3. Misapprehension of fundamental characteristic
4. Apparent importance
5. Situation
6. Mistakes can’t be at risk of the mistaken party

Question 6

Explain to me the mistake of existing contract (civil law)

Answer 6

A contract has to be created, that then maybe later leads to misunderstandings between 2 parties e.g Peerless ship

Question 7

Explain to me the mistake of the misapprehension of fundamental characteristics?

Answer 7

The other party would have acted differently if we would have known the truth about a certain and important characteristic of the contact

Question 8

explain to me the ‘apparent importance’ mistake under civil law

Answer 8

Apparent importance - the party should provide proof that the mistaken party would have acted differently, or not entered the contract if they had known the truth

Question 9

the 3 circumstances under situation ( mistake for availability of a contract under civil law)

Answer 9

1. The party gives incorrect info to the other party which causes the other party a mistake
2. Disclosure - not disclose certain information to the other party - linked to the principle of good faith
3. Common mistake between the parties - misapprehension of reality

Question 10

Explain ‘ the mistake should not come at the risk of the mistaken party ‘

Answer 10

The mistaken party should not have taken the risk - then he can’t avoid the contract

Question 11

Explain the difference between ‘term’ and ‘representation’ (common law)

Answer 11

‘term’ - specified in the contract. It is binding - legal consequence if breached by one of the parties
‘ representation’ - facts that are not written in the contact. NOT BINDING. but have to be true. If they are untrue –> misrepresentation - contract void and can claim damages

Question 12

is there duty to disclose info in common law? exception

Answer 12

No, there is not. Arms length contract. Parties should investigate information on their own. HOWEVER - if it is a fiduciary relation then yes

Question 13

What are the 3 types of misrepresentation?

Answer 13

1. Fraudulent - lie to the other party. Causes harm - declare the contract void and claim damages
2. Negligent - careless volunteer of info that believes it was true. Can declare the contract void and claim damages
3. Innocent - the party statement without fault. Belives it was true - declare the contract void and can claim damages if prove shown to the court that it was not innocent

Question 14

Tell me about silence in common law

Answer 14

Silence in common law (disclosure of info) does not make the contract void.( if there is no duty to speak) However, if the seller provides information, voluntarily, and then it results that that info is false, then the buyer can claim damages or make the contract avoidable

Question 15

What is fraud?

Answer 15

Deliberately deceiving another party- bad intention - lying

Question 16

What is the threat? ( civil law) Fine line between what 2 terms

Answer 16

The threat is concluding a contract out of fear. Threatening one person, relatives, or possessions. There is a fine line between threat and legally acceptable pressure

Question 17

What is wrongful exploitation?

Answer 17

Taking advantage of or exploiting the party’s vulnerability.

Question 18

Wrongful exploitation under GER, FR AND ENG

Answer 18

FR - a special case of threat
GER - separate provision on usury - deliberate exploitation of the vulnerable and the excessive advantage from the other
ENG - ‘undue influence’ - the above and also show there is a special relation of trust - partner, lawyer, doctor, parent