Day 1 Flashcards
What is a Unilateral Mistake
When only one of the parties is mistaken as to an essential element of the contract, either party can generally enforce the contract on its terms
Under a Unilateral Mistake can either party void the contract?
Yes, the mistaken party can void the contract if the mistaken party did not bear the risk of mistake and either: the mistake would make enforcement of the contract unconscionable; or the non mistaken party: failed to disclose the mistake despite knowing or having reason to know that the other party was mistaken or having a duty to disclose the fact about which the other party was mistaken; or caused the mistake
What must occur for a rescission of a unilateral mistake
There must be an absence of serious prejudice to the other party
What is a Mutual Mistake
Occurs when both parties are mistaken to an essential element of the contract
What is the test for Mutual mistake
There must be a substantial difference between the deal as it was contemplated and the actual deal, with no intent by the parties to take a risk on that element of the contract
When is reformation for a mistake available?
When: there is a prior agreement between the parties; there was an agreement by the parties to put that prior agreement into writing; and as a result of a mistake there is a difference between the prior agreement and the writing
What is misunderstanding?
Occurs when both parties believe that they are agreeing to the same material terms, but in fact they agree to different terms
What is misrepresentation?
an assertion that is contrary to the existing facts
What is fraudulent misrepresentation?
Fraud exists if the misrepresentation is made: knowingly; without confidence in the assertion; and when the person making the assertion knows that no basis exists for the assertion
What is non disclosure?
Nondisclosure of a known fact is tantamount to an assertion that the fact does not exist, if the party not disclosing the fact knows that:
disclosure is necessary to prevent a previous assertion from being a misrepresentation or fraudulent;
disclosure would correct a mistake of the other party as to a basic assumption and the failure to disclose would constitute lack of good faith and fair dealing;
Disclosure would correct a mistake of the other party as to the contents or effect of a writing evidenced in their agreement or the other party is entitled to know the fact because of a confidential or fiduciary relationship
What is fraud in the execution?
occurs when the fraudulent misrepresentation prevents a party from knowing the character or essential terms of the transaction
this contract is treated as void
What is fraud in the inducement?
occurs when a fraudulent misrepresentation is used to induce another to enter into a contract
this contract is treated as voidable
What is undue influence?
the unfair persuasion of a party to assent to a contract
What is duress?
an improper threat that deprives a party of a meaningful choice
What is an implied in fact contract?
when words express the intent of the parties the contract is an express contract
What is an implied in law (quasi) contracts
when a plaintiff confers a benefit on a defendant and the plaintiff has a reasonable expectation of compensation allowing the defendant to retain the benefit without compensating the plaintiff would be unjust
when is restitution allowed under an implied in law contract
the court may allow restitutionary recovery if the plaintiff has conferred a measurable benefit on the defendant; and the plaintiff acted without gratuitous intent and it would be unfair to let the defendant retain the benefit because either the defendant had an opportunity to decline the benefit but knowingly accepted it or the plaintiff had a reasonable excuse for not giving the defendant such opportunity
Under the UCC what is an express warranty?
any promise, affirmation, description, or sample that is part of the basis of the bargain is an express warranty, unless it is merely the sellers opinion or commendation of the value of the goods
Implied warranty of merchantability?
a warranty is implied whenever the seller is a merchant
what is required for implied warranty of merchantability ?
to be merchantable goods must be fit for their ordinary purpose and pass without objection in the trade under the contract description
implied warranty of fitness for a particular purpose?
a warranty that the goods are fit for a particular purpose is implied whenever the seller has reason to know that the buyer has particular use for the goods and the buyer is relying upon the sellers skill to select the goods
