Defects of consent, good faith and contractual terms Flashcards

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1
Q

defects of consent

A

when a party’s intention to be bound by a contract has not been properly expressed

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2
Q

what are the causes of defects of consent

A
  1. legality- void
  2. capacity- void/ voidable
  3. mistake- voidable
  4. misrepresentation- voidable
  5. undue influence- voidable
  6. duress- voidable
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3
Q

the difference between void and voidable

A

void= juridical act is never valid; automatically applied (by court); the contract cannot be enforced by either of the party
voidable= juridical act is initially valid, co not void in itself; may be avoided (annulled); avoidance is retroactive (cancellation of a contract and the return of the parties to the positions they had before the contract)

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4
Q

legality

A

contracts must not be prohibited by law or be against public policy or good morals
Illegal contracts are void

examples:
- a contract to commit a crime
- a contract which is damaging to the country’s foreign relations
- a contract endangering public safety
- an immoral contract (sell of human organs)
- an agreement to defraud the public/ corruptiom

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5
Q

capacity

A

contracts entered into by incapables may be avoided or are sometimes even void.
most important grounds: mental impairment and minors

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6
Q

minors- English law

A

the age of legal capacity= 18
no statutory representative
exceptions:
- contracts for necessaries:
- requires at a relevant certain point in time
- certain ‘condition in life’
- pay a reasonable price
- employment if they are to the minor’s benefit

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7
Q

minors- French law

A

can enter into legal transactions
can be anulled when it brings an economic disadvantage to the minor

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8
Q

minors- German law

A

legal incapacity- < 7 yrs
limited legal capacity- 7-18:
- no consent of parents- if the minor obtains ‘legal benefits’
- consent of parents- not only a ‘legal benefit’

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9
Q

mistakes- requirements civil law

A
  1. contract
  2. misapprehension- has to be essential
  3. causal link
  4. apparent importance
  5. situation- one of the 3 categ:
    - the mistake is caused by incorrect info given by the other party
    - the mistake is caused by non-disclosure by the other party
    - common mistake (both parties did not know)
  6. risk- it could have been avoided or not
    - inexcusable mistake:
    -expertise of the party
    - cost of acquiring the relevant info by the other party
    - whether the other party could reasonable acquire the info for itself
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10
Q

mistakes under English law

A

no general duty
Caveat emptor- let the buyer beware- a purchaser must investigate and ask questions, the seller does not have the duty to provide info

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11
Q

misrepresentation- English law

A

a spoken or unwritten statement of fact which induces a party to conclude a contract
silence= no misrepresentation
3 conditions:
- not silence
- inducement to enter the contract
- reliance in the statement

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12
Q

types of misrepresentation

A

A. Fraudulent- knows that it is making a false statement
- remedies: rescission + damages

B. Negligent- carelessly makes a representation while having no reasonable basis to believe it to be true
- remedies: rescission + damages

C. Innocent- made without fault, believed its statement to be true and reasonably believed it was true
- remedies: rescission, rarely damages

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13
Q

undue influence/ abuse of circumstances

A

one party abuses of their personal influence or authority over the other party to make them enter a transaction

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14
Q

duress

A

requirements:
- illegitimate threat
- the threat must be such that a reasonable person would be influenced by it and typically imminent

physical as well as economic
threat with legal remedies is not unlawful

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15
Q

review of contractual content

A

types of clauses:
- obligations and conditions
- attribution of outside events (force majeure)
- remedies and limitation
- termination
- general (notice, applicable law, jurisdiction)

common use of standard contractual terms: terms and conditions

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16
Q

good faith

A
  1. supplementary function- when there are gaps or ambiguities- fill based on what is considered good faith
  2. interpretative function- good faith guides the court to understand the intentions
  3. restrictive function- good faith imposes limits on behaviour