Podcast
Questions and Answers
What type of error occurs when both parties make the same mistake regarding an essential aspect of the contract?
What type of error occurs when both parties make the same mistake regarding an essential aspect of the contract?
What must a misrepresentation be in order to be considered valid?
What must a misrepresentation be in order to be considered valid?
In the case Raffles v Wichelhaus, what type of error was identified?
In the case Raffles v Wichelhaus, what type of error was identified?
What is necessary for a contract to be void due to mutual error?
What is necessary for a contract to be void due to mutual error?
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What term defines an error that is induced by misrepresentation and is material but not necessarily essential?
What term defines an error that is induced by misrepresentation and is material but not necessarily essential?
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What could void a contract based on common error according to case law?
What could void a contract based on common error according to case law?
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According to Scots law, under what condition might a misrepresentation not need to relate to an essential matter?
According to Scots law, under what condition might a misrepresentation not need to relate to an essential matter?
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What is the implication of an induced unilateral error according to the case Ritchie v Glass?
What is the implication of an induced unilateral error according to the case Ritchie v Glass?
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What effect does a fraudulent misrepresentation have on a contract?
What effect does a fraudulent misrepresentation have on a contract?
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Which of the following cases illustrates negligent misrepresentation?
Which of the following cases illustrates negligent misrepresentation?
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In which situation can a unilateral error challenge a contract?
In which situation can a unilateral error challenge a contract?
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What distinction does negligent misrepresentation have compared to innocent misrepresentation?
What distinction does negligent misrepresentation have compared to innocent misrepresentation?
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What happens to B's title when A has no title during a transfer?
What happens to B's title when A has no title during a transfer?
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Under what circumstances does a misrepresentation become merely voidable?
Under what circumstances does a misrepresentation become merely voidable?
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Which case directly relates to a fraudulent misrepresentation?
Which case directly relates to a fraudulent misrepresentation?
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Which statement accurately describes the concept of 'snatching at a bargain'?
Which statement accurately describes the concept of 'snatching at a bargain'?
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Study Notes
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Defective Agreements - Part II
- Title: Defective Agreements - Part II
- Sub-title: How do I get out of this transaction?
Error
- An error as to an essential aspect of the contract
- Bilateral or unilateral
Bilateral Error: 2 Types
- Mutual error: Parties misunderstanding essential elements of the contract (e.g., Raffles v Wichelhaus, Stuart & Co v Kennedy)
- Common error: Both parties make the same mistake regarding an essential part of the contract (e.g., Hamilton v Western Bank of Scotland, McLaughlin v The New Housing Association Ltd)
Case Law - Bilateral Error
- Raffles: Mutual error about the ship; different ships, different delivery periods
- Stuart: No consensus, but performance did happen... question of remedy
- Hamilton: Common error regarding price, missed statutory provisions for calculation
- McLaughlin: Common error regarding price, missed statutory provisions for calculation
Induced Unilateral Error
- Scots law recognizes misrepresentation inducing unilateral error
- The misrepresentation must be material, affecting a reasonable person's decision to enter the contract
Misrepresentation
- Misrepresentation occurs when one party persuades another to enter a contract under a false belief
- It must be a statement of fact, not opinion (e.g., Flynn v Scott)
- Essential error due to misrepresentation renders the contract void; otherwise, it's voidable
- Misrepresentation must be made to the innocent party by the other party to the contract
Three Forms of Misrepresentation
- Innocent: No intention to mislead
- Fraudulent: Intention to mislead
- Negligent: Carelessly made false statement
Misrepresentation (Specific Cases)
- Innocent: Boyd & Forrest v Glasgow & South Western Railway Co
- Fraudulent: Fraud proved where false representation made knowingly or without belief in truth, or recklessly
- Negligent: Cramasco LLP v Ogilvie-Grant, Earl of Seafield (case involving Law Reform); Various acts, including Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 s.10
Uninduced Unilateral Errors
- Generally ineffective
- Example cases include Stewart v Kennedy, Menzies v Menzies
- Contract challenge possible if "error plus" (e.g., snatching a bargain) present
- Illustrative case mention of Angus v Bryden, Wills v Strategic Procurement (UK) Ltd, Chwee Kin Keong v Digilandmall.com
Transfer of Ownership
- A has good title: B acquires good title upon transfer
- A has no title: B's title is void (nemo dat quod non habet)
- A has title, but transfer contract is void: B acquires no valid title
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Description
This quiz covers key concepts from Defective Agreements - Part II, detailing the process of exiting a transaction due to errors in contracts. Explore the distinctions between bilateral and unilateral errors and understand the implications through landmark cases. Get ready to test your knowledge on contract law essentials.
