Week Four Flashcards
What is a bilateral error in contracts?
A bilateral error occurs when both parties are mistaken about an essential aspect of the contract.
What is a mutual error?
A mutual error occurs when parties are at cross purposes on an essential term of the contract, which may render the contract void.
What is an example of a mutual error case?
Raffles v Wichelhaus (1864): Example of mutual error regarding a ship, one leaving in October and another in December.
What issue was raised in Stuart & Co v Kennedy (1885)?
No consensus was reached, yet performance occurred, raising questions about remedies.
What is a common error?
A common error occurs when both parties make the same mistake regarding an essential aspect, having the same effect as mutual error.
What is an example of a common error case?
Hamilton v Western Bank of Scotland (1861): Both parties were at error as to price.
What statutory provision was missed in McLaughlin v The New Housing Association Ltd (2008)?
Both parties missed a statutory provision.
What is an induced unilateral error?
An induced unilateral error occurs when a misrepresentation by one party induces error in the other regarding a non-essential, but material aspect.
What is an example of an induced unilateral error case?
Ritchie v Glass (1936): Indicates that if misrepresentation had not occurred, the contract may not have been entered.
What is misrepresentation in contract law?
Misrepresentation occurs when one party persuades another to enter a contract under a mistaken belief.
What must misrepresentation involve?
An inaccurate statement of fact, not merely opinion.
What is an example of a case involving opinion versus fact in misrepresentation?
Flynn v Scott (1949): Saying a van is in good running order does not count if it is merely an opinion.
What are the effects of misrepresentation on a contract?
If misrepresentation induces an essential error, the contract is void.
If not essential, the contract is voidable.
To whom must misrepresentation be made?
Misrepresentation must be made to the innocent party by the other party in the contract.
What right does misrepresentation provide in contract law?
Misrepresentation provides the right to avoid a contract.
Which types of misrepresentation give rise to the right to sue for damages?
Only fraudulent and negligent misrepresentations give rise to the right to sue for damages.
What is innocent misrepresentation?
Misrepresentation made without fault, where the representor genuinely believes in the truth of the statement.
What is a case reference for innocent misrepresentation?
Boyd & Forrest v Glasgow & South Western Railway Co 1915 SC (HL) 20 (W&B 6-36).
What is fraudulent misrepresentation?
A false representation made knowingly, or without belief in its truth, or recklessly as to its truth or falsity.
What did Lord Herschell say about proving fraud?
“Fraud is proved where it is shown that a false representation has been made knowingly, or without belief in its truth, or recklessly, careless whether it be true or false.”
What are some case references for fraudulent misrepresentation?
Derry v Peek (1889) 14 App Cas 337, 334.
Smith v Sim 1954 SC 357.
What is negligent misrepresentation?
A statement made carelessly or without reasonable grounds for belief in its truth.
What are some case references for negligent misrepresentation?
Cramasco LLP v Ogilvie-Grant, Earl of Seafield [2014] UKSC 9 (W&B 6-38).
Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 s.10.
Do uninduced unilateral errors generally affect the contract?
Generally, these errors have no effect on the contract.
Generally, these errors have no effect on the contract.
Stewart v Kennedy (1890) 17R (HL) 25.
Menzies v Menzies (1893) 1 SLT 60 (W&B 6-19).
How can contracts or transactions be challenged with “error plus”?
Snatching at a bargain:
Steuart’s Trustees v Hart (1875) 3 R 192.
Angus v Bryden 1992 SLT 884 (W&B 6-25).
Wills v Strategic Procurement (UK) Ltd [2013]
CSOH 26 (W&B 6-26).
Chwee Kin Keong v Digilandmall.com [2004] 2
SLR 594.
Gratuitous Transactions:
Hunter v Bradford Property Trust Ltd 1970 SLT
173.
Edgar v Edgar [2014] CSOH 60.
What happens if A has good title and transfers it to B?
On transfer, B acquires good title.
What happens if A has no title and transfers it to B?
On transfer, B’s title is void (nemo dat quod non habet).
What happens if A has title but the contract for transfer is void?
B’s title is void.
What is the issue in Scenario A where Carlos believes he is hiring a painting for a dinner party, but Mustapha thinks it is a sale?
Misunderstanding over the nature of the contract (hire vs. sale).
What is the issue in Scenario D where Carlos thinks the painting is a Dali, and Mustapha is aware of Carlos’s misbelief but does not correct it?
Unilateral error with potential misrepresentation by omission.
What is the issue in Scenario B where Mustapha sells a painting claiming it is an Andy Warhol, but it is painted by his dentist?
Misrepresentation of the painting’s authenticity.
What is a bilateral error?
Both parties hold a mistaken belief.
What is the issue in Scenario C where both parties believe the painting is a Bosch, but it is a copy by a dentist?
Common error regarding the painting’s identity.
What is a mutual error?
Misunderstanding between parties about terms.
What is a common error?
Both parties share the same mistaken belief.
What is a unilateral error?
Only one party holds a mistaken belief.
What are substantial errors?
Errors essential to the validity of a contract.
What are concomitant errors?
Errors that are not essential, secondary issues.
What is an induced error?
An error caused by the other party.
What is an uninduced error?
An error not caused by the other party.
What is the effect of a void contract?
The contract is null and void.
What is the effect of a voidable contract?
The contract is valid until challenged.
What are the grounds for challenge when there is a disproportionate benefit during vulnerability?
Facility and circumvention.
Which type of error does not give rise to damages?
Uninduced unilateral error.
Whose interests are protected by courts in voidable agreements?
All parties involved.
