Week 8 - defective agreements

Question 1

Describe conditions for avoiding voidable agreements

Answer 1

Restitutio in integrum must be possible
No unreasonable delay
Rights of third parties must not be affected
Contract must not have been ratified under s.4 ALCSA 1991 or affirmed under s.1 (3) RWSA 1995

Question 2

How does force and fear effect contracts ?

Answer 2

Renders them void

Question 3

Name different cases relating to different threats under force and fear

Answer 3

Threat of immediate violence
Earl of Orkney v Vinfra (1606) Mor 16481
Threat of lawful action
Hunter v Bradford Property Trust Ltd 1977 SLT (Notes) 33
Other threats
Hislop v Dickson Motors (Forres) Ltd 1978 SLT (Notes) 73

Question 4

What are the elemetns of facility and circumvention?

Answer 4

Facility - Weakmindedness
Circumvention - trickery/ misleading
Lesion - lost

Question 5

A case that left contract voidable ?

Answer 5

McGilvary v Gilmartin 1986 SLT 8

Question 6

What are the elements of undue influence?

Answer 6

Advantage taken of relationship of trust
dominant/ subordinate parties
Material and gratuitous benefit to stronger party
Lack of independent advice for weaker party

Question 7

Must all elements of facility and circumvention be met ?

Answer 7

Yes howeevrr not all must be met to the same extent ( the greater degree of facility the less circumvention needed to satisfy ground)

Question 8

Describe element of sexually transmitted debt

Answer 8

Lender must act in good faith, advise guarantor (cautioner) of consequences of signing deed and to seek independent legal advice.
Deed only challengeable where gratuitous i.e. no benefit to signatory ( not undue influence)

Question 9

A case regarding sexually transmitted debt

Answer 9

Smith v Bank of Scotland plc 1997 SC (HL) 111 (W&B 6.44

Question 10

What are the substantials?

Answer 10

Subjects
Person (where essential)
Price
Quality (where essential)
Nature

Question 11

Essential errors can be?

Answer 11

Bilateral or unilateral

Question 12

Name and describe the two types of bilateral essential error

Answer 12

Mutual error (parties at cross purposes on an essential of the contract) renders contract void
Common error (both parties make the same mistake on an essential) has the same effect.

Question 13

Describe elements of unilateral errors

Answer 13

Can be treated as misrepresentation when induced by the other party

Can be challenged on grounds of error only where there is “error plus”

Question 14

Give examples of error plus

Answer 14

Snatching at a bargain: Steuart’s Trustees v Hart (1875) 3 R 192; Followed in: Angus v Bryden 1992 SLT 884; Wills v Strategic Procurement (UK) Ltd [2013] CSOH 26
Gratuitous transactions: Hunter v Bradford Property Trust Ltd 1970 SLT 173; Edgar v Edgar [2014] CSOH 60

Question 15

What is the effect of unilateral errors induced by misrepresentation ?

Answer 15

Contract will be voidable

Question 16

What are the 3 types of misrepresentation ?

Answer 16

Fraudulent , innocent and fact

Question 17

Give 3 examples of corresponding cases

Answer 17

Innocent - : Boyd & Forrest v Glasgow & South Western Railway Co 1915 SC (HL) 20
Fraudulent - Smith v Sim 1954 SC 357
Negligent - Hedley Byrne v Heller & Partners Ltd [1964] AC 465

Question 18

Can you receive damages from innocent misrepresentation ?

Answer 18

NO

Question 19

Can you claim damages from fraudulent misrepresentation without leaving the contract ?

Answer 19

YES

Question 20

What effect does negligent misrepresentation have ?

Answer 20

Makes contract voidable and can claim damages