Chapter 8 - Factors Affecting The Contractual Relationship

Front 1

What is misrepresentation?

Back 1

Above statement or fact; can be fraudulent, negligent or innocent.

Front 2

What is material misrepresentation?

Back 2

Apple statement that induces someone to enter into a contract.

Front 3

Define fraudulent misrepresentation

Back 3

when a person makes a false statement knowing it is

Front 4

Define negligent misrepresentation

Back 4

When a person should have known the statement was false

Front 5

Define innocent misrepresentation

Back 5

When the false statement is made without malice

Front 6

What is the remedy for innocent misrepresentation?

Back 6

Rescission, Returns the parties to the position they were in prior to the contract. Damages are not available because both parties are innocent.

Front 7

What are the remedies for fraudulent misrepresentation?

Back 7

Recession and damages awarded for the tort of Deceit. Damages can be awarded win or session is not available, can also seek punitive damages.

Front 8

What is the remedy for negligent misrepresentation?

Back 8

Damages

Front 9

Define duress

Back 9

A person is induced into a contract by threats of violence or imprisonment, can also be threats to personal property or Goods. Must prove threat was the main inducement or entering into the contract

Front 10

What is the remedy for duress?

Back 10

Voidable contract, victim of a voidable contract may be denied a remedy if it would jeopardize a third-party.

Front 11

Define undue influence

Back 11

When pressure from a dominant trusted person make it impossible to bargain freely.

Front 12

What is the remedy for undue influence?

Back 12

The contract is voidable

Front 13

Explain mistake

Back 13

An error surrounding the contract that destroys consensus, must go to the root of the contract. Contract is void

Front 14

Explain shared mistake

Back 14

When two parties are in complete agreement with both have made the same mistake regarding some aspect of the contract, usually a fundamental aspect of the contract.

Front 15

What happens with contract with a shared mistake?

Back 15

The contract is void for lack of consensus, and the steak as to the value of the contract usually does not affect the enforcer ability of the contract.

Front 16

What is the remedy for shared mistake?

Back 16

If the written contract does not reflect the common intention of the party it's the courts can correct it.

Front 17

Explain misunderstanding

Back 17

When we the party is aware of the others a different understanding of the contract.

Front 18

How is a misunderstanding remedied?

Back 18

Court will apply the reasonable person test to determine which interpretation of the contract is more reasonable. Contract will only be declared void if both interpretations are reasonable and the court cannot decide between them

Front 19

Explain one-sided mistake

Back 19

Only one party is making a mistake to the contract

Front 20

How is one-sided mistake remedied?

Back 20

The general rule is if there is no Miss River representation or misleading information by the other party there is no recourse.

Hint 20

Caveat emptor applies. Let the buyer beware

Front 21

What is the parol evidence rule?

Back 21

Generally courts do not permit outside evidence to determine the meaning of a contract term. There are some exceptions.

Front 22

What is privity of contract?

Back 22

Only parties to a contract are bound by the contract. Third parties cannot enforce it or be bound by the terms.

Front 23

What are the exceptions to privity of contract?

Back 23

Original party to the contract can enforce it when the benefit is to be bestowed on an outsider, land, agent, trust, constructive Trust, Novation, principled exception

Front 24

Explain the exception to privacy of original party to a contract can enforce it when the benefit is to be bestowed on an outsider.

Back 24

If Peter hires a landscaping company to mow Sarah's lawn Sarah cannot enforce the contract but Peter can.

Front 25

Explain the land exception to privity

Back 25

Rights run with the land

Hint 25

The person who purchased a house with the renter must honor the lease of the renter

Front 26

Explain agent exception to privity

Back 26

Contract is between the principal and the other Contracting party

Front 27

Explain trust exception to privity

Back 27

One person transfers property to another for the benefit of a third party. The third party or beneficiary can enforce the agreement

Front 28

Explain consecutive trust exceptions to privity

Back 28

I trust inferred by the courts even though the parties did not specifically create one.

Front 29

Explain Novation exception to privity

Back 29

When the parties agree to substitute a third party for one of the original parties

Front 30

Explain principled exception to privity

Back 30

Contract extends to third parties when it makes sense the contract was intended to extend to them.

Hint 30

Example. An exemption Clause can be extended to employees of a Contracting party.

Front 31

Explain assignment

Back 31

The transfer of rights under a contract to another person.

Front 32

What are the limitations of assignment

Back 32

Only benefits can be signed, assignee is in no better position than assignor