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15 Cards in this Set

  • Front
  • Back

What are the 3 types of mistakes in a K?

1. common mistake - both parties believe some erroneous fact

2. mutual mistake - both parties are mistaken, but believe something different

3. unilateral mistake - only one party is mistaken and the other knows the truth

A K that is never formed and has no property rights passed is what type of K?

What are some examples of this type of K?

VOID Contract;

An unlawful K, a K that restricts trade, a K that restricts marriage, a K with uncertain terms, or a K that outlines an impossible event

A K in which the court decides if it is equitable to set aside K is what type of K?

What are 3 examples of this type of K?

VOIDABLE Contract;

A K with a minor, an illegal K, or K that outlines an impossible event

What are some characteristics associated with a VOIDABLE contract? (4)

1. Lacks free will of one party

2. Valid until aggrieved party acts

3. Consent is not free

4. Right, title, and interest can pass

What is the remedy for a VOIDABLE K?

Rescission (ending of a K)

What happens if goods are transferred to an innocent 3rd party during the course of a VOIDABLE K?

What is this called?

The title may stay with 3rd party;

"Purchased for value without notice"

What does a "mistake" mean within the context of a K?

A mistake in LAW, not error in judgement

A mistake with respect to: terms of the K OR assumptions regarding the facts leading to the formation of the K

Why might a mistake about terms within a K arise?

When will relief be granted?

One party may inadvertently use the wrong words in stating the terms;

If the reasonable person would have recognized that a mistake was made

When is there relief regarding a K that had mistakes in recording the terms?

What is the remedy for this mistake?


1. parties were in complete agreement

2. there are no further negotiations to amend the K

Rectification (correction of the mistook term)

Rectification is the correcting of a mistook term within a K -- what will rectification NOT correct? (2)

What happens if terms are ambiguous?

Rectification will not correct an error in judgement; will not correct fault in due diligence

If terms are ambiguous, or parties carried on subsequent negotiations, courts will be hesitant to alter the final document.

If two parties have different interpretations of an ambiguous term in a K, what will the court decide?

Court will apply the most reasonable interpretation in light of all the circumstances

If a party makes a mistake about the EXISTENCE of the subject matter in a K, what will happen?

If the subject of the K was destroyed prior to the K formation, the K is VOID.

If a party makes a mistake about the VALUE of the K, what will the courts consider first?

Will relief be granted?

Courts will consider what the mutual intentions of the parties were; what the parties expectations were;

Relief may be granted if it would be harsh not to do so.

Give an example of a K with a mistake about the value of the subject matter of the K.

A person enters into a contract to buy a car thinking that the price was CAD, when in fact the price was in USD.

What type of mistakes are mistakes regarding the identity of the parties?

If an existing identity is assumed, the K becomes ___________?

If a fake identity is a party to the K, the K becomes _______________?

These are unilateral mistakes (one party is mistaken, but the other is aware of the truth);