Vitiating Factors : General Principles Vitiating Factors and Mistake

Question 1

Name five or more vitating factors that undermine a contract?

Answer 1

1. Mistake
2. Misrepresentation
3. Misleading and Deceptive Conduct
4. Duress
5. Undue Infulence
6. Unconscionable Conduct
7. Unfair Terms
8. Illegality.
9. Legislation

Question 2

What are the four forms of mistake that may provide contractual remedies in limited circumstances?

Answer 2

1. Common mistake
2. Mutual Mistake
3. Unilateral Mistake
4. Non es factum.

Question 3

What is a common mistake?

Answer 3

A common mistake occurs when both parties are mistaken about the same thing (eg, the authenticity of a piece of art)

Question 4

What is a mutual mistake?

Answer 4

A mutual mistake occurs when both parties are mistaken but about different things; often where such mistakes exists the agreement might be too vague or uncertain to be enforceable without the need to rely on mistake as a separate cause of action.

Question 5

What type of mistake occurs when one party is mistaken about some aspect of the contract but the other is not.

Answer 5

Unilateral Mistake.

Question 6

What does ‘Non est factum’ mean?

Answer 6

‘This is not my deed’

Question 7

Briefly describe ‘Non est factum’

Answer 7

Non est factum (it is not my deed) is established where a party is mistaken about the nature of the document they are signing - essentially that, through no fault or neglect of their own they were unable to understand the meaning or the significance of the document they were signing.

Question 8

What are some facts about VOID contracts?

Answer 8

1. Contracts have not come into existence, thus have never existed.

Question 9

When a contract that requires one party to perform its obligtaion that is impossible or illegal, a contract will be considered..

Answer 9

VOID

Question 10

What is ‘void ab initio’?

Answer 10

‘from the beginning’. When a contract is void ab initio, it means that the contract in fact never existed and thus any consideration which moved between the parties did not legally change ownership.

Question 11

What is a Voidable contract?

Answer 11

1. Voidable contracts it may be rescinded by one or both parties.
2. It is not void, as a party can elect to rescind the contract.
3. Contract usually become voidable if they were entered into because of a vitiating factor such as a misrepresentation, duress, undue influence or others.
4. Damages are not available.

Question 12

What occurs during the running of a contract and the contract stops so that rights and liabilities in the future no longer apply.

Answer 12

TERMINATION

Question 13

What right and liabilties, (those that have already dallen due before the terminating event) are enforceable?

Answer 13

Accrued rights and liberties.

Question 14

Rescission is …

Answer 14

the contract is treated as if it had never existed

Question 15

Rescission remedy is available when something has gone wrong during ..

Answer 15

negotiation for the contract.

Such as misrepresentation, misleading and deceptive conduct, unconscionable conduct, undue influence, duress or mistake.

Question 16

Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd [2003] QB 679

According this case what are the five definitions of common law mistake?

Answer 16

1. There must be a common assumption as to the existence of a state of affairs
2. There must be no warranty by either party that that state of affairs exists
3. The non-existence of the state of affairs must not be attributable to the fault of either party
4. The non-existence of the state of affairs must render performance impossible
5. The state of affairs may be the existence, or a vital attribute, of the consideration to be provided or circumstances which must subsist if performance of the contract is to be possible