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Undue influence can be proven by the aggrieved person.
Undue influence can be proven by the aggrieved person.
False
The remedy of restitutio in integrum restores only one party to their original position.
The remedy of restitutio in integrum restores only one party to their original position.
False
The innocent party can choose to uphold the contract and still receive a full refund.
The innocent party can choose to uphold the contract and still receive a full refund.
False
The contract terminates immediately when the innocent party decides to rescind the contract.
The contract terminates immediately when the innocent party decides to rescind the contract.
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Both parties are required to restore performances made under the contract when it is rescinded.
Both parties are required to restore performances made under the contract when it is rescinded.
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The remedy of restitutio in integrum only applies to contracts, not other transactions.
The remedy of restitutio in integrum only applies to contracts, not other transactions.
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The innocent party has no obligation to communicate their decision to rescind the contract to the other party.
The innocent party has no obligation to communicate their decision to rescind the contract to the other party.
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A contract entered into due to duress, undue influence or misrepresentation is deemed valid unless proven otherwise.
A contract entered into due to duress, undue influence or misrepresentation is deemed valid unless proven otherwise.
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Duress involves the use of physical force to intimidate a party into a contract.
Duress involves the use of physical force to intimidate a party into a contract.
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A threatened party can set aside a contract and claim damages if they entered into it under duress.
A threatened party can set aside a contract and claim damages if they entered into it under duress.
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A threat to a party's family is not considered a legitimate cause for duress.
A threat to a party's family is not considered a legitimate cause for duress.
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A contract is void if entered into under duress.
A contract is void if entered into under duress.
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A threat must be of an imminent or inevitable evil to be considered duress.
A threat must be of an imminent or inevitable evil to be considered duress.
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All threats, including lawful threats, can be considered duress.
All threats, including lawful threats, can be considered duress.
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Disclosure is obligatory in all circumstances.
Disclosure is obligatory in all circumstances.
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Puff statements can be considered misrepresentations.
Puff statements can be considered misrepresentations.
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Statements of opinion can be considered misrepresentations.
Statements of opinion can be considered misrepresentations.
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Non-disclosure of a fact can be actionable if the party remaining silent is under a duty to reveal the fact.
Non-disclosure of a fact can be actionable if the party remaining silent is under a duty to reveal the fact.
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All contractual terms are considered warranties.
All contractual terms are considered warranties.
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A person has no duty to disclose facts that may affect the contract.
A person has no duty to disclose facts that may affect the contract.
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A party can only cancel the contract if misrepresentation is proven.
A party can only cancel the contract if misrepresentation is proven.
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Misrepresentation must be made with the intention of inducing the other party to contract.
Misrepresentation must be made with the intention of inducing the other party to contract.
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If a party would have contracted irrespective of the misrepresentation, then rescission is possible.
If a party would have contracted irrespective of the misrepresentation, then rescission is possible.
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A causal misrepresentation is one that does not induce the contract but results in less advantageous terms for a party.
A causal misrepresentation is one that does not induce the contract but results in less advantageous terms for a party.
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There is a general duty on a party negotiating a contract to reveal all information known to him that may influence the mind of the other party in deciding whether to contract or not.
There is a general duty on a party negotiating a contract to reveal all information known to him that may influence the mind of the other party in deciding whether to contract or not.
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A party has a duty to inform by operation of the rule of law in an insurance policy.
A party has a duty to inform by operation of the rule of law in an insurance policy.
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There are only two types of misrepresentation: intentional and negligent.
There are only two types of misrepresentation: intentional and negligent.
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A misrepresentation made by an independent third party is only actionable against the party who made the contract.
A misrepresentation made by an independent third party is only actionable against the party who made the contract.
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The misrepresentation itself must have persuaded the party to enter into the contract.
The misrepresentation itself must have persuaded the party to enter into the contract.
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To be considered material, a misrepresentation must have induced a reasonable person to enter into the contract.
To be considered material, a misrepresentation must have induced a reasonable person to enter into the contract.
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A party may obtain rescission and restitution for an incidental misrepresentation.
A party may obtain rescission and restitution for an incidental misrepresentation.
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Misrepresentation can be made with the intention of inducing the contract, but not actually resulting in the contract.
Misrepresentation can be made with the intention of inducing the contract, but not actually resulting in the contract.
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An agent making a misrepresentation must have made it in the course of contracting.
An agent making a misrepresentation must have made it in the course of contracting.
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A party is always involuntarily dependent on the other party for frank disclosure due to their particular knowledge.
A party is always involuntarily dependent on the other party for frank disclosure due to their particular knowledge.
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The party making the misrepresentation must have known that the other party would believe and act on it.
The party making the misrepresentation must have known that the other party would believe and act on it.
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In a situation of fair dealing, the right to have information communicated would be mutually recognised by honest men in the circumstances.
In a situation of fair dealing, the right to have information communicated would be mutually recognised by honest men in the circumstances.
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Rescission is possible for intentional misrepresentation only.
Rescission is possible for intentional misrepresentation only.
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The misrepresentation must have been the only factor that persuaded the party to enter into the contract.
The misrepresentation must have been the only factor that persuaded the party to enter into the contract.
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Study Notes
Duress and Undue Influence
- A contract is deemed voidable at the instance of the innocent party when entered into due to duress or undue influence.
- The innocent party is aware of with whom and on what terms they are contracting, unlike material mistake.
- The contract will be deemed valid until misrepresentation, coercion, or undue influence is proven.
Duress
- Duress involves improper pressure leading to intimidation, where one enters a contract under fear as a result of an illegitimate threat.
- Consent obtained by improper means makes the contract voidable at the option of the threatened party.
- The threatened party may set aside and claim restitution and damages.
Elements of Duress
- Actual violence or reasonable fear.
- The fear must be caused by the threat of some considerable evil to the party or their family.
- The threat must be of an imminent or inevitable evil.
- The threat or intimidation must be contra bonos mores.
- The moral pressure used must have caused damage.
- The threat must be unlawful.
- The effective cause of the contract (but for the threat, the innocent party would not have contracted at all).
Coercion
- Coercion involves vis compulsive, or coercion of the will (not physical force).
- Disclosure is obligatory in certain circumstances, such as where an omission of facts has created a misleading impression.
Misrepresentation
- Misrepresentation involves a false statement of fact.
- A statement made with an intention to deceive is a misrepresentation.
- Non-disclosure or misrepresentation by silence is actionable if the party remaining silent is under a duty to reveal the fact.
Types of Misrepresentation
- Intentional (fraudulent) misrepresentation.
- Negligent misrepresentation.
- Innocent misrepresentation.
Undue Influence
- Undue influence occurs when one party exploits their influence over another to persuade them to enter into a transaction that is detrimental to them.
- The onus is on the party alleging undue influence to prove it occurred.
- Remedy for undue influence: Restitutio in integrum, which attempts to restore both parties to their original position.
Remedies
- Cancel contract (action redhibitoria) or sue for reduction of purchase price (action quanti minoris).
- Restitutio in integrum, which entitles the innocent party to set aside the legal consequences of the contract and restore any property or benefits received.
- If the innocent party chooses to uphold the contract, they are bound by its terms.
- If they elect to rescind the contract, it terminates upon receipt of notice, and a duty arises on both parties to restore and/or return any performance made.
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Description
Test your understanding of voidable contracts, including duress, undue influence, and misrepresentation. Learn about the circumstances that make a contract voidable and how it affects the parties involved.
