Lecture 4 - Contract Misrepresentation and Termination Flashcards
What are the three types of misrepresentation?
Fraudulent - knowing or not caring whether a statement is true or not
Negligent - carelessly believing the statement to be true
Innocent - genuine mistake with no intention to deceive
What would not qualify as a misrep?
A statement of opinion
A sales puff
A statement of law
Silence (unless it amounts to a half-truth etc)
When is the right to rescind lost?
Where restitution is impossible
Where action is not taken within a reasonable time
Where the innocent party carries on with the contract
Damages can only be claimed as of right in fraudulent and negligent misrep. The court MAY award damages under innocent misrep.
What are the different types of mistake?
Common mistake - parties make same mistake. Contract is voided
Mutual mistake - different mistakes by each party. Contract is voided unless a ‘reasonable man’ would still think a contract exists.
Unilateral mistake - one party makes a mistake but the other knows or out to know. Contract is usually voided.
Non est Factum
‘This is not my act’
If he person signs a document, he will normally be bound its terms, unless it can be proved:
The document he intended to sign was radically different
He was not careless in signing the document
How does a contract come to an end?
Performance
Breach
Agreement
Frustration
What are the exceptions to performance of a contract having to be exact to the detail?
Severance - breaking contract in to several components
Acceptance of part performance - agree to end the contract part way through
Substantial performance - contract is virtually completed
Prevention of performance - one party prevents contract from being performed
When is time ‘of the essence’?
It is expressly stated it will be of the essence
It is obviously implicit by the nature of the contract
It is expressly made of the essence by notice during the performance of the contract
ALL commercial and business contracts presume time to be of the essence.
Types of claim for breach of contract
NOTE A breach of condition will entitle the party to cancel, whereas breach of warranty only allows for damages. For innominate terms, the court will ‘wait and see’.
Damages
The amount its worth (Quantum Meruit)
Specific performance
Injunction
Remoteness of damage
To be the subject of a damages claim, the loss must not be too remote from the breach. Usually the amount of damages will be any additional cost of buying alternative goods or the cost of rectifying the defects in goods you have.
