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Questions and Answers
A threat of dismissal that is not expressed can still be considered as a form of coercion.
A threat of dismissal that is not expressed can still be considered as a form of coercion.
True (A)
A contract entered into due to duress, undue influence, or misrepresentation is deemed void from the beginning.
A contract entered into due to duress, undue influence, or misrepresentation is deemed void from the beginning.
False (B)
The more reasonable the fear, the greater will be the reluctance of the court to accept that it actually induced the contract.
The more reasonable the fear, the greater will be the reluctance of the court to accept that it actually induced the contract.
False (B)
Duress involves the use of physical force to intimidate a party into entering a contract.
Duress involves the use of physical force to intimidate a party into entering a contract.
Silence is always indicative of free consent.
Silence is always indicative of free consent.
If a contract is entered into under duress, the threatened party can set aside the contract and claim damages.
If a contract is entered into under duress, the threatened party can set aside the contract and claim damages.
The threat must be directed at the life or bodily integrity of a person's immediate family.
The threat must be directed at the life or bodily integrity of a person's immediate family.
A threat to commit a lawful act can constitute duress.
A threat to commit a lawful act can constitute duress.
In cases of duress, the moral pressure used must have caused damage.
In cases of duress, the moral pressure used must have caused damage.
A threat is only considered imminent if it is actually carried out.
A threat is only considered imminent if it is actually carried out.
Coercion operates on the body of the victim by forcing them to choose between entering the contract or suffering harm.
Coercion operates on the body of the victim by forcing them to choose between entering the contract or suffering harm.
Coercion of the will is a type of physical force.
Coercion of the will is a type of physical force.
Proof of protest at the time of payment or entry into the contract is always necessary to prove involuntary nature of the transaction.
Proof of protest at the time of payment or entry into the contract is always necessary to prove involuntary nature of the transaction.
The threat used in duress must be of an imminent or inevitable evil.
The threat used in duress must be of an imminent or inevitable evil.
The onus of proving undue influence lies with the party who was exploited.
The onus of proving undue influence lies with the party who was exploited.
The remedy of restitutio in integrum is only available to the guilty party.
The remedy of restitutio in integrum is only available to the guilty party.
If the innocent party chooses to rescind the contract, they are not bound by its terms.
If the innocent party chooses to rescind the contract, they are not bound by its terms.
The innocent party is not entitled to set aside the legal consequences of the contract.
The innocent party is not entitled to set aside the legal consequences of the contract.
Undue influence occurs when a person acts of their own free will.
Undue influence occurs when a person acts of their own free will.
The restitutio in integrum remedy is only available in cases where the contract is invalid.
The restitutio in integrum remedy is only available in cases where the contract is invalid.
The duty to restore performances arises only after the contract has been rescinded.
The duty to restore performances arises only after the contract has been rescinded.
A misrepresentation must be made with the intention of inducing the other party to contract but does not necessarily have to result in the contract being formed.
A misrepresentation must be made with the intention of inducing the other party to contract but does not necessarily have to result in the contract being formed.
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.
A causal misrepresentation is a type of misrepresentation that results in less advantageous terms for a party.
A causal misrepresentation is a type of misrepresentation that results in less advantageous terms for a party.
A party may obtain rescission and restitution for an incidental misrepresentation.
A party may obtain rescission and restitution for an incidental misrepresentation.
Intentional misrepresentation is a type of misrepresentation that occurs when a party makes a statement that they believe to be true.
Intentional misrepresentation is a type of misrepresentation that occurs when a party makes a statement that they believe to be true.
There are only two types of misrepresentation: intentional and negligent.
There are only two types of misrepresentation: intentional and negligent.
The misrepresentation itself must have persuaded the party to enter into the contract for it to be considered a causal misrepresentation.
The misrepresentation itself must have persuaded the party to enter into the contract for it to be considered a causal misrepresentation.
Intentional misrepresentation of a false fact made with the intention of persuading the other party to conclude the contract renders the contract voidable.
Intentional misrepresentation of a false fact made with the intention of persuading the other party to conclude the contract renders the contract voidable.
Negligent misrepresentation of a false fact made with the intention of persuading the other party to conclude the contract renders the contract void.
Negligent misrepresentation of a false fact made with the intention of persuading the other party to conclude the contract renders the contract void.
Innocent misrepresentation of a false fact made with the intention of persuading the other party to conclude the contract renders the contract void.
Innocent misrepresentation of a false fact made with the intention of persuading the other party to conclude the contract renders the contract void.
A contract entered into due to misrepresentation is deemed void from the beginning.
A contract entered into due to misrepresentation is deemed void from the beginning.
Remedies for negligent misrepresentation include setting aside the contract, enforcing the contract, and claiming damages if loss is suffered.
Remedies for negligent misrepresentation include setting aside the contract, enforcing the contract, and claiming damages if loss is suffered.
Remedies for innocent misrepresentation include setting aside the contract and enforcing the contract, but not claiming damages.
Remedies for innocent misrepresentation include setting aside the contract and enforcing the contract, but not claiming damages.
Intentional misrepresentation is made with the intention of persuading the other party to conclude the contract, and is made recklessly or without honest belief in its truth.
Intentional misrepresentation is made with the intention of persuading the other party to conclude the contract, and is made recklessly or without honest belief in its truth.
Negligent misrepresentation is a type of misrepresentation made with the intention of persuading the other party to conclude the contract.
Negligent misrepresentation is a type of misrepresentation made with the intention of persuading the other party to conclude the contract.
Innocent misrepresentation is a type of misrepresentation made with the intention of deceiving the other party to conclude the contract.
Innocent misrepresentation is a type of misrepresentation made with the intention of deceiving the other party to conclude the contract.
A false fact made negligently or innocently can still be considered a misrepresentation.
A false fact made negligently or innocently can still be considered a misrepresentation.
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Study Notes
Intentional Misrepresentation
- Involves representation of a false fact made fraudulently.
- Must be believed by the representee and induced them to contract.
- Made knowingly, without honest belief in the truth, or recklessly.
- Renders the contract void.
Negligent Misrepresentation
- Representation of a false fact made negligently.
- Belief by the representee must induce the contract.
- Results in a voidable contract.
- Remedies include setting aside the contract, enforcing the contract, or claiming damages for any loss suffered.
Innocent Misrepresentation
- False fact represented innocently.
- Believed by the representee and induced the contract.
- Renders the contract voidable.
- Remedies limited to setting aside or enforcing the contract; no damages claim available.
Coercion and Duress
- Coercion pressures the victim's mind, forcing a choice between contracting or facing harm.
- Reasonable fear: The threat must be significant and affect a reasonably steadfast person.
- Paragon Business Forms case illustrates that an illogical or unreasonable fear is insufficient to induce a contract.
- Threats must target life, bodily integrity, property, or immediate family.
- Absence of protest during contract entry does not negate relief if evidence supports the contract's involuntary nature.
Elements of Duress
- Actual or reasonable fear due to a threat of significant evil.
- Threat must be imminent or inevitable.
- Intention to induce the contract is crucial; misrepresentation must foreseeably persuade the other party.
- Rescission is possible if the misrepresentation directly resulted in the contract formation.
Types of Misrepresentation
- Causal Misrepresentation: Leads to the formation of a contract.
- Incidental Misrepresentation: Results in less favorable terms without inducing the contract.
Duress Elements
- Improper pressure and intimidation leading to a contract.
- Consent obtained through illegitimate threats is voidable.
- Elements include: actual violence or fear, threat of imminent evil, unlawful threats, and causing damage.
Undue Influence
- Involves coercion of will without physical force.
- Claims must prove that the influence was exploited to obtain agreement on detrimental terms.
- Remedy of Restitutio in Integrum aims to restore parties to pre-contractual positions.
Restitutio in Integrum
- Allows the innocent party to set aside the contract's legal effects.
- If rescinded, notice must be communicated, terminating the contract upon receipt.
- Both parties are obligated to return any performances made under the contract.
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