Contract Law: Rescission of Contracts
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Questions and Answers

What was the outcome in Car & Universal Finance Co v Caldwell?

  • Notifying the police and the Automobile Association was sufficient to rescind the contract. (correct)
  • The seller was required to take legal action to rescind the contract.
  • The contract was considered void from the start.
  • The seller was unable to rescind the contract.

    • What is the term for when a party to the contract, aware of the other party's misrepresentation, continues with the contract?

  • Rescission
  • Misrepresentation
  • Affirmation (correct)
  • Breach of contract

    • What test is used to determine if affirmation has occurred?

  • The dual knowledge test (correct)
  • The reasonable person test
  • The contractual obligation test
  • The misrepresentation test

    • What happens if there is a significant lapse of time between the making of the contract and the discovery of the misrepresentation?

    <p>The right to rescind may be lost, depending on the circumstances.</p> Signup and view all the answers

    What is the term for situations where the right to rescind will be lost?

    <p>Bars to rescission</p> Signup and view all the answers

    When does a party affirm a contract despite being aware of misrepresentation?

    <p>When they are aware of both the misrepresentation and the right to rescind</p> Signup and view all the answers

    What happens if a party is unable to make substantial restitution in a contract?

    <p>The party loses the right to rescind</p> Signup and view all the answers

    What is the condition for making substantial restitution according to the case of Salt v Stratstone?

    <p>Giving a financial accounting for any diminution in its value</p> Signup and view all the answers

    What is the effect of affirmation on a contract?

    <p>The contract is ratified and becomes a valid contract</p> Signup and view all the answers

    What is the primary remedy for misrepresentation in a contract?

    <p>Rescission</p> Signup and view all the answers

    What is a key takeaway from the case discussed in the text?

    <p>The representee is not aware of the untruth of the statement if they do not inspect the documents provided.</p> Signup and view all the answers

    What is the limitation of rescission in this scenario?

    <p>The purchaser can rescind the contract if they relied on another inducement.</p> Signup and view all the answers

    What is the consequence for the purchaser if they do not inspect the documents provided?

    <p>The purchaser cannot rescind the contract.</p> Signup and view all the answers

    What is the remedy for misrepresentation in this scenario?

    <p>Rescission of the contract.</p> Signup and view all the answers

    What happens if the purchaser employed their own surveyor to verify the vendor's representation?

    <p>The purchaser's surveyor is liable for the negligence.</p> Signup and view all the answers

    What is the requirement for a statement to be considered a factor that led to entering into a contract?

    <p>It must play a real and substantial part</p> Signup and view all the answers

    What must be proved strictly in order to rebut the presumption that a misrepresentation induced the contract?

    <p>The representee was aware of the untruth of the statement</p> Signup and view all the answers

    What happens when a misrepresentation is made by one party and the other party subsequently enters into a contract with that party?

    <p>It is presumed that the misrepresentation induced the contract</p> Signup and view all the answers

    What is the consequence of the representee having the opportunity to discover the untruth of the statement but not taking it?

    <p>The representation is still considered a misrepresentation</p> Signup and view all the answers

    What is the main purpose of establishing that a statement is a term in a contract?

    <p>To rescind the contract for misrepresentation</p> Signup and view all the answers

    How difficult is it to rebut the presumption that a misrepresentation induced the contract?

    <p>Very difficult</p> Signup and view all the answers

    Under which section of the Misrepresentation Act 1967 can a contract be rescinded for misrepresentation?

    <p>Section 1(a)</p> Signup and view all the answers

    What is the result if a party affirms a contract after discovering a misrepresentation?

    <p>The contract remains enforceable</p> Signup and view all the answers

    What is required for a statement to be an actionable misrepresentation?

    <p>A clear and unambiguous false statement of existing fact or law</p> Signup and view all the answers

    What is the limitation of rescinding a contract for misrepresentation under the Misrepresentation Act 1967?

    <p>Rescission is only available if the misrepresentation is also a term of the contract</p> Signup and view all the answers

    What type of contracts require parties to disclose relevant information, even if not asked?

    <p>Contracts of utmost good faith (uberrimae fidei)</p> Signup and view all the answers

    What is the consequence if any information relevant to the risk insured is not disclosed in an insurance contract?

    <p>The insurer can rescind the contract</p> Signup and view all the answers

    What is the principle that applies in English contract law, which means the buyer is responsible for discovering any defects or problems with the goods or services?

    <p>Caveat emptor (let the buyer beware)</p> Signup and view all the answers

    In which type of contracts is there no general duty to disclose facts?

    <p>English contracts</p> Signup and view all the answers

    What is the limitation of rescission in contracts?

    <p>Rescission is only possible if the contract is voidable</p> Signup and view all the answers

    What is essential for a relational contract, according to Leggatt J's judgment?

    <p>Act reasonably and with fair dealing</p> Signup and view all the answers

    In what type of contracts did Leggatt J imply a duty of good faith?

    <p>Relational contracts</p> Signup and view all the answers

    What can beexpress or implied in a contract, according to the provided text?

    <p>Statement by conduct</p> Signup and view all the answers

    In which case did the court hold that an express right to terminate a contract did not need to be exercised in good faith?

    <p>Monde Petroleum SA v Westernzagros Ltd</p> Signup and view all the answers

    Why did Leggatt J's enthusiasm for the concept of good faith not resonate in recent appellate decisions?

    <p>Because it was not echoed in recent appellate decisions</p> Signup and view all the answers

    What is implied in a relational contract, according to Leggatt J?

    <p>A duty to act reasonably and with fair dealing</p> Signup and view all the answers

    Which court ruling seemed to contradict Leggatt J's concept of good faith?

    <p>Mid Essex Hospital Services NHS Trust v Compass Group UK and Ireland Ltd</p> Signup and view all the answers

    What was the context of Leggatt J's attempt to revive the concept of good faith?

    <p>In one of his final judgments as a High Court Judge</p> Signup and view all the answers

    What is a characteristic of relational contracts, according to Leggatt J?

    <p>They involve collaborating with each other</p> Signup and view all the answers

    In which case did Leggatt J make an attempt to revive the concept of good faith?

    <p>Sheikh Tahnoon Bin Saeed Shakhboot Al Nehayan v Ioannis Kent</p> Signup and view all the answers

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