Vitiating factors Flashcards
What are three types of preliminary statements?
1) Sales puff (
2) Contract term (action if breach)
3) Representation (may be actionable as misrepresentation)
What is the primary test for preliminary statements?
Common intention of the parties when they entered the contract.
What is a misrepresentation?
An untrue statement of fact made by one party to a contract by words or conduct to other party which induced the other to enter into the party.
What are the three types of misrepresentation?
- Fraudulent (knowledge or recklessness to untruth)
- Negligent (carelessly made)
- Innocent misrepresentation (if reasonable).
What happens in recission?
Neither party need perform future obligations and each party should return money setting aside contract rights.
Under what circumstances are the right to recession lost?
- Affirmation (may elect to continue).
- Undue delay (when misrepresentation should have been discovered)
- Impossible to restore goods or property
What is the effect of duress?
Makes contract voidable (same as misrepresentation).
What is undue influence ?
A) Influence that goes beyond what is regarded as acceptable
B) Where one party is in a position to influence another and takes unfair advantage of that position.
When will a creditor have constructive notice?
A) it ought to have been put ‘on inquiry’ and
B) It did not take reasonable steps to ensure that the surety was aware of implications they were signing
Under what circumstances will a mistake operate?
- Both parties must be at fault it can’t just be one.
- Contract must not make express provisions on the matter.
- Mistake must be fundamental
What is a cross-purpose mistake?
Each party asserts that contract exists on their own favourable grounds. Conclusion is there is no contract.
What is a unilateral mistake?
Only one party is mistaken? often renders contract void.
What if mistake is due to creditorworthyness or identity ?
If it is creditworthiness generally insufficient to effect the validity of contract
