Factors vitiating a contract

Question 1

What are the three factors that may vitiate a contract?

Answer 1

1. Misrepresentation
2. Duress
3. Unreasonable ROT

Question 2

When will a restraint clause be reasonable and valid?

Answer 2

1. Protects employer’s legitimate business interests
2. Scope, area and duration
3. Must not be against public interest
4. Other factors considered by the court

Question 3

What are elements of misrepresentation?

Answer 3

1. Statement of facts, not opinion
2. Made by one contracting party to the other
3. Made before the contract is concluded
4. Statement induces the party to enter the contract

Question 4

What are the 3 types of misrepresentations?

Answer 4

1. Fraudulent
2. Negligent
3. Innocent

Question 5

Which types of misrepresentations can claim damages?

Answer 5

Fraudulent and Negligent

Question 6

Which types of misrepresentations can allows parties to rescind the contract?

Answer 6

All 3 types of misrepresentation, however only fraudulent and negligent can claim damages

Question 7

What are factors that may affect the rescission of the contract?

Answer 7

1. Property cannot be returned
2. Unreasonable delay
3. Affirmed the contract

Question 8

What is economic duress?

Answer 8

Economic duress is threatening or black mailing the innocent party that had no other choice but to sign the contract

Question 9

Is the innocent party liable to pay extra if there is economic duress?

Answer 9

No if the court held that economic duress was exercised to exploit the situation, no need to pay extra. Innocent party can also rescind the contract unless he affirms the contract.