MISREPRENSENTATION

Question 1

Define misrepresentation:

Answer 1

Misrepresentation happens when one party makes a false statement of fact that leads the other party to enter into a contract.

Question 2

How is Misrepresentation Treated Differently:

Answer 2

1. Usually a Defence: If proven, the contract can be cancelled (rescinded).
2. Can be a Cause of Action: Misrepresentation can also be the reason for suing
3. breach of contract = broken promise → handled only under contract law

Question 3

Define recession:

Answer 3

ending or canceling the contract, parties return to state they were before the contract

Question 4

Define void:

Answer 4

means contract never actually came into legal existences

Question 5

3 Types of Misrepresentation + their remedies:

Answer 5

1. Innocent Misrepresentation: remedy for this is recession (In tort, there is no remedy)
2. Negligent misrepresentation: remedy for this is rescission and possible monetary value
3. Fraudulent misrepresentation: remedy for this is recession and compensation

Question 6

Expand on Contracts Requiring Disclosure:

Answer 6

There is no general duty at common law to negotiate a contract in good faith, no rule in common law that says people have to be honest or fair when negotiating a contract

Basically, you can negotiate for your own benefit and don’t have to act in “good faith” (honestly or fairly) — unless something else says you do

There are common law and statutory exceptions to this general principle

1. Exceptions at Common Law: If one side knows something important that the other doesn’t (special knowledge), the law might expect them to be honest about it.
2. Exceptions at Statutory: Sometimes the government steps in to make things fairer when one side has more power or information than the other. These laws require honesty and full disclosure, even if the common law doesn’t.

Applies to : security law, franchise law

Question 7

Expand on Consumer Contracts:

Answer 7

“Let the buyer beware” –> Normally, it’s the buyer’s job to check what they’re buying — not the seller’s job to explain everything

Question 8

2 examples of contracts that need extra honesty and openness:

Answer 8

Remote contracts: where the contract is made away from the seller’s store or office (like online or door-to-door).

Executory contracts: where goods or services are delivered after payment.

Question 9

Explain this: “A party cannot fail to ask the correct questions and then rely on a lack of disclosure” →

Answer 9

You can’t blame the other side for not telling you something if you didn’t even ask. The law expects you to do some due diligence

Question 10

Expand on these 3 Additional defences to being bounded by a contract: Undue influence, unconsiousbility, and duress

Answer 10

1. Undue Influence:
   Legal defense to avoid being bound by a contract
   Happens when one party has emotional influence or pressure over the other’s decision, depriving the person of their ability to make an independent decision about entering the contract

Typically happens in one of the two situations:

-When there is a special relationship between parties
-When there is a special situation between parties

2. Unconscionability:
   Legal defence to avoid being bound by a contract
   Happens when there is a large power imbalance between parties, and the stronger party takes advantage of the weaker one
3. Duress:
   Someone is forced to agree to a contract because of threats (like violence or jail).