Week 3 & 4: Matters Affecting Validity Flashcards
Which case highlights that third party rights are not protected under void agreements.
Morrison v Robertson.
- M thought he was contracting with Wilson not T
- The contract with T was void
- There was an error in the substantials
- M had been induced into agreement by misrepresentation
- M entitled to get cows back from R
What case highlights that third party rights are protected under voidable agreements?
Macleod v Kerr.
- There was no error as to identity
- The contract between K and G was voidable not void
- Misrepresentation did not induce error therefore not an error in the substantial
- Car had been resold therefore restitutio in itegrum not possible.
‘All people have capacity to enter into contracts.’
What are the four exceptions?
- Children*
- Incapable adults
- The intoxicated
- Illegal aliens
Under what circumstances can children enter contracts.
- Bargains commonly entered into
- Not unreasonable
Which Act regulates the ability for children to enter contracts?
Age of Legal Capacity (Scotland) Act 1991
What Act provides for adults with incapacity in Scotland
Adults with Incapacity (Scotland) Act 2000.
What case highlights force and fear in the negotiation process ?
Earl of Orkney v Vinfra
What case highlights that the threat of lawful action does not constitute force and fear ?
Hunter v Bradford Property Trust Ltd
What case highlights that a right cannot be passed down if a party is facile or there is circumvention.
Macgilvary v Gilmartin.
- Daughter stayed with Mother following the passing of Father
- Daughter convinced Mother to sell property
- Mother declared unfit to understand and comprehend the implications of agreement
- Contract declared voidable.
What are the three key elements of undue influence?
- Lack of independent council for weaker party
- Gratitious benifit for stronger party
- Ascendent and subordinate relationship between the parties
What are the seven circumstances under which a contract may be declared void?
- Force and fear
- Age
- Incapable adults
- Intoxication
- Enemy aliens
- Induced unilateral error
- Bilateral error
What are the circumstances under which a contract may be declared voidable?
- Facility and circumvention
- Undue influence
What are the two forms of bilateral error
Mutual: Parties are at cross purposes on an essential terms of the contract
Common: Parties both make the same mistake on an essential.
Which case highlights mutual error?
Raffles v Winchelhaus.
- Mutual error as to ship (one leaving in October and one leaving in December)
- Both ships had the same name
Which case highlights common error?
Hamilton v Western Bank of Scotland
- A bank sold a property that it was not aware that it in fact did not own
Which case highlights that a matter of opinion cannot be considered induced unilateral error?
Flynn v Scott.
- Party suggested van was in good working order.
What was the judgement in Ritchie v Glass?
Induced unilateral error can be described as when a reasonable man only enters a contract because of the misrepresentation made by the other party.
What are the three forms of misrepresentation?
- Innocent
- Fraudulent
- Negligent
X v BBC
Contract void due to incapacity (intoxication).
Hislop v Dickson Motors
You can blackmail someone into repaying money by using a lawful threat only insofar as it restores the money lost. Legitimate pressure is not force and fear
Stuart v Kennedy
Mutual error as to units of measurement.
McLaughlin
Common error: Both missed a statutory provision preventing the conclusion of the bargain.
Boyd & Forrest v Glasgow & South Western Railway
Facts:
o Firm tendered to build a railway line based on data by the railway company
o Railway proported that the area of land concerned was comprised of soft rock, when in fact it was bedrock
o The actual cost turned out £1000 more than otherwise would have been necessary
o Information provided was correct
o Innocent mistake
o Employee had altered information, innocently, and not with malice
o Impossible to
Judgement:
o Restiutio in integrum not possible – because it was innocent
o Court declared that when bedrock was discovered they should have stopped
In summary: Innocent Misrepresentation
Smith V Sim
Facts:
o Seller had provided the buyer with incorrect turnover figures of a pub in Montrose
o Smith paid a lot more than he should for the pub than was reasonable
Judgement:
o Eligible to claim damages
In Summary: Fraudulent Misrepresentation
