W39: Defects of consent, contractual terms, and good faith

Question 1

What are defects of consent?

Answer 1

A defect of consent is when a party’s intention to be bound by a contract has not been properly expressed; the consent to be bound is then defective.

It is unfair for such a party to be bound: the defect of consent may lead to the contract being void.

Question 2

What are the causes of defect of consent?

Answer 2

1. Legality (void)
2. Capacity (void/voidable)
3. Mistake (voidable)
4. Misrepresentation (voidable)
5. Undue influence (voidable)
6. Duress (voidable)

Question 3

What does void mean?

Answer 3

When judicial act is void, it can never be valid. It is automatically applied (by a court). The contract cannot be enforced by either party.

Question 4

What does voidable mean?

Answer 4

When a judicial act is voidable, it is initially valid, so not void in itself. It may be avoided (annulled), and avoidance is retroactive.

Question 5

What does it mean that avoidance is retroactive?

Answer 5

When avoidance occurs, the contract is cancelled and the parties are returned to the positions they would’ve if the contract had not been made.

Question 6

What does legality mean?

As a cause for defect of consent.

Answer 6

Legality refers to that contracts must not be prohibited by law or be agains public policy or good morals.

Illegal contracts are void.

Question 7

What are some examples of illegal contracts?

Answer 7

• A contract to commit a crime (e.g. sell drugs),
• A contract which is damaging to foreign relations,
• A contract endangering public safety,
• An immoral contract (e.g. a contract to sell a human being), or
• An agreement to defraud the public/corruption.

Question 8

What does capacity mean?

As a cause for defect of consent.

Answer 8

Legal capacity is the ability of a natural person to enter into valid legal transactions. In principle, everyone can enter into a contract.

Contracts entered into by incapables may be avoided or are sometimes even void.

Question 9

What are the most important grounds to make a capacity claim?

Answer 9

The most important grounds for a capacity claim are mental impairment and minors.

Question 10

How are minors represented in English law?

Answer 10

People reach the age of capacity at 18. Before that time, they have no statutory representative (the court can appoint a parent or other person to represent a child for a specific purpose).

Question 11

In English law, what are the exceptions to minors’ lack of statutory representation?