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15 Cards in this Set
- Front
- Back
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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 |
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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 |
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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 |
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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 |
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What is the remedy for a VOIDABLE K? |
Rescission (ending of a K) |
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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" |
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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 |
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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 |
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When is there relief regarding a K that had mistakes in recording the terms? What is the remedy for this mistake? |
If: 1. parties were in complete agreement 2. there are no further negotiations to amend the K Rectification (correction of the mistook term) |
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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. |
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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 |
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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. |
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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. |
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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. |
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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); VOID; VOIDABLE |
