Vitiating factors Flashcards
What are vitiating factors?
Can make the contract void or voidable, as if it never existed or where the consumer can choose to continue or claim remedies
What is misrepresentation?
When a party has made an untrue statement during negotiations, which the other party has relied on and was induced by it
What are the four stages of misrepresentation?
-Untrue statement of fact (nature)
-That induced the other party
-Type of misrepresentation
-Remedies
What are the side rules to the nature of misrep?
-Opinion/Advertising puff
-No intention of acting
-Misrep by actions/conduct
-Silence
-> part truth, change of circumstances, utmost good faith and trust relationship all under silence
What is the rule on opinion/advertising puff for misrep? name the key case
Cannot be a misrep (Bissett v Wilkinson)
What is the rule on having no intention or acting in misrep? name the key case
Untrue statement, is a misrep (Edgington v Fitzmaurice)
What is the rule on misrep by actions/conduct? name the key case
Does not need to be written or verbal, still a misrep (Spice Girls Ltd v Aprilia World)
What is the rule on silence in misrep? name the key case
Cannot be a misrep, no obligation to say anything but it must be verbal if so (Fletcher v Krell)
What is the rule on part truth in misrep? name the key case
Exception to silence - can be a misrep (Dimmock v Hallett)
What is the rule on change in circumstances in misrep? name the key case
Exception to silence - can become misrep if it becomes false before contract is made, info must be corrected (With v O’Flanagan)
What is the rule on utmost good faith in misrep? name the key case
Exception to silence - can be a misrep if not all material facts are disclosed (Lambert v Co-Operation Insurance)
What is the rule on relationships based on trust in misrep?
Exception to silence - more likely to be a misrep (Tate v Williamson)
What is stage two of misrep? name the key case
Must induce the party to enter the contract, more likely to be a misrep if they are a trader/expert (Attwood v Small) - false statement must be critical part of decision
What is stage three of misrep? name the key case
Types of misrep:
-Fraudulent (Derry v Peek)
-Negligent
-Innocent
What is fraudulent misrep? name the key case
Either you know the statement to be false or you are reckless as to whether or not it is true (Derry v Peek)
What is negligent misrep? name the key act
False statement with no reasonable grounds for believing it is true, careless. S2(1) Misrepresentation Act 1967 held the burden of proof is on the person making the statement that there were reasonable grounds
What is innocent misrep? name the key act
Mistepresentation Act 1967 - genuinely held on reasonable grounds, false statement is made honestly
What are the remedies for innocent misrep compared to fraudulent/negligent?
Only recission, however the court has the discretion to award damages from S2(2) if equitable - compared to both recission and damages for other two
What are the remedies for misrep?
Recission - parties returned to pre-contractual positions, only granted if fair and not impossible to return
Damages - all actual damage or loss is claimable
What is economic duress?
When someone enters a contract as a result of financial threats (damaging a business or person)
What is stage one of economic duress?
There must be illegitimate pressure that leaves the victim with no real choice and causes them to enter into the contract (Universe Tankships)
What is stage two of economic duress?
Four factors from Pao On:
-Protest about pressure?
-Any other reasonable course of action?
-Independently advised before taking action?
-Take steps to make contract void?
(Not all needed)
What is the side rule for stage two of economic duress?
If the action threatened is lawful, it may not be economic duress (CTN Cash&Carry v Gallagher)
What are the remedies for economic duress?
Restitution only - equitable remedy that repays money/property paid under duress
