Free Consent

Question 1

Free Consent

Answer 1

Consent must be free from vices such as error, fraud, and duress

Question 2

How is consent vitiated?

Answer 2

by error, fraud or duress

Question 3

Error can be

Answer 3

unilateral or bilateral

Question 4

To vitiate based on Error

Answer 4

to vitiate consent based on error, the error must concern a cause without which the obligation would not have been incurred

Question 5

Bilateral Error

Answer 5

both parties have made an error concerning a cause without which the obligation would not have been incurred

contract is relatively null-can be rescinded or confirmed

Question 6

Unilateral Error

Answer 6

one party made an error
(1) concerning a cause without which the obligation would not have been incurred
(2) the cause was known or should have been known to the other party

Question 7

When does a unilateral error concern a cause without which the obligation would to have been incurred?

Answer 7

(1) bears on the nature of the contract
(2) the thing that is the contractual object or a substantial quality of the thing
(3) the person or quality of the person
(4) law-refers to parties understanding of the law, not ignorance of it
(5)any other circumstance the parties should have regarded in good faith

Question 8

Nullity Time

Answer 8

If error, fraud or duress vitiates consent-the parties have 5 years from the time the vice was discovered (or ceased in the case of error) to seek recession of relatively null contract

Question 9

Remedy due to error

Answer 9

if the party new or should have known of the other party’s error, they may not seek damages

erroneous party can seek recession but will be liable for his error UNLESS the other party knew or should have known of the error

Question 10

If the non-erroneous party knew or should have known of the other party’s error AND acted in bad faith, the erroneous party can:

Answer 10

(1) rescind the contract
(2) not owe damages to the non-erroneous party
(3) be awarded damages

Question 11

What does bad faith require?

Answer 11

intentional and malicious

Question 12

Three exceptions to the general rule of recission for error

Answer 12

(1) if the non-erroneous party is willing to perform
(2) the court may refuse rescission when the effective protection of the other party’s interest requires that the contract be upheld
(3) the court may refuse rescission where the erroneous party’s error is inexcusable

Question 13

Fraud

Answer 13

fraud is the misrepresentation or suppression of the truth made with the intent to gain an advantage for one party or cause a loss for the other. Fraud may also consist of inaction or silence.

Question 14

Four requirements for fraud to vitiate consent

Answer 14

(1) the victim’s error was induced by the fraud of the defrauder
(2) the definition of fraud is satisfied
(3)the truth is not ascertainable or was ascertainable only through special skill, difficulty or inconvenience (a special relationship is an exception)
(4)The fraud was perpetrated by the other party or by a third party and that party knew or should have known of the fraud

Question 15

A misrepresentation or suppression of the truth is satisfied by:

Answer 15

a scheme, conspiracy, some lies (puffery or sales talk and a UEM representing as majority are exceptions), concealment, silence

Question 16

Duty to speak can arise from

fraud

Answer 16

special relationship, the factual scenario, or the law

Question 17

Fraud must be proved with

Answer 17

specificity-5 Ws and H.-preponderance of the evidence

Question 18

Duress vitiates consent

Answer 18

when it is exerted by a party to the contract or a third party and is of such a nature to a cause
a reasonable fear of injury that is unjust and considerable to the person, property or reputation of the one contracting, her spouse, ascendent, descendant or other close person