Questions and Answers
A contract entered into due to duress, undue influence, or misrepresentation is deemed void from the start.
False
Duress involves the use of physical force to obtain consent.
False
A threatened party may not claim restitution and damages if they entered into a contract under duress.
False
The moral pressure used in duress must be contra bonos mores.
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The threat in duress must be unlawful and the effective cause of the contract.
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Duress involves coercion of the will, not physical force.
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Coercion operates on the physical body of the victim by forcing him/her to choose between entering the contract or suffering physical harm.
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The threat must be directed at the life, bodily integrity, or property of a stranger.
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Silence is always indicative of free consent.
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The threat must be sufficiently grave to affect the mind of a reasonably steadfast person.
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The court will always accept that a threat induced the contract if the victim alleges it.
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A threat must be imminent or inevitable to constitute duress.
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Undue influence can be proven by the aggrieved person.
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Restitutio in integrum is a remedy that favors the party who exerted undue influence.
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The innocent party can choose to uphold the contract despite undue influence.
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If the innocent party chooses to rescind the contract, the other party does not have to restore any performance made.
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The contract terminates immediately when the innocent party decides to rescind it.
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Restitutio in integrum is only available if the contract was fully performed.
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Disclosure is obligatory in cases where an omission of facts has created a misleading impression.
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A false statement of opinion made by one party to another before or at the time of the contract concerning some matter or circumstance relating to it is considered misrepresentation.
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A party is under a duty to reveal a fact only if they have a contractual relationship.
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Active concealment is a form of implied misrepresentation.
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A statement of opinion is considered a misrepresentation of fact.
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Designed concealment is a type of intentional concealment of information.
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Non-disclosure of a fact is only actionable if the party remaining silent is under a moral obligation to reveal the fact.
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A material statement of fact is one that is made with the intention of persuading the other party to conclude the contract.
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Canceling the contract is the only remedy for misrepresentation.
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Misrepresentation requires a false statement of fact made by a party to the contract.
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The party making the misrepresentation must have the intention of deceiving the other party.
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Study Notes
Introduction to Contract Law
- A contract can be deemed voidable if entered into due to duress, undue influence, or misrepresentation, where consensus has been reached improperly.
- Unlike material mistake, parties are aware of with whom and on what terms they are contracting.
- The contract is valid until misrepresentation, coercion, or undue influence is proven.
Duress
- Duress is improper pressure leading to intimidation, making one party enter a contract out of fear.
- Consent obtained by improper means makes the contract voidable at the option of the threatened party.
- The threatened party can set aside the contract, 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 threat must be the effective cause of the contract.
Coercion
- Coercion operates on the mind of the victim, forcing them to choose between entering the contract or suffering harm.
- The threat must be sufficiently grave to affect the mind of a reasonably steadfast person.
- The object of the threat must be directed at the life, bodily integrity, or property, or immediate family.
- There must be proof of protest at the time of payment or entry into the contract, or satisfactory evidence to establish that the contract was concluded as a result of duress.
Undue Influence
- Undue influence occurs when one person exploits their influence to persuade the other party to agree to a transaction that is detrimental to them.
- The remedy for undue influence is restitutio in integrum, which attempts to restore both parties to their original position.
- The innocent party can set aside the contract, restore the original position, and claim restitution and damages.
Misrepresentation
- Misrepresentation is a false statement of fact made by one party to another before or at the time of the contract.
- The misrepresentation must be a false statement of fact, material, made by a contracting party, with the intention of persuading the other party to conclude the contract.
- Non-disclosure of a fact is actionable if the party remaining silent is under a duty to reveal the fact.
- Active concealment, designed concealment, and intentional concealment of information are all forms of misrepresentation.
- The remedy for misrepresentation is cancellation of the contract or reduction of the purchase price.
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