Impeachment
grounds in which a contract may be set aside
Recission
- the setting aside of a contract due to a defect in its formation such as a mistake, misrepresentation, duress or undue influence
- the discharge of the contract by the subsequent agreement of the parties
- defect must be there before formation
Object of recission
- to place parties as closely as possible back to their pre-contractual positions
- not compensation/damages
Mistake in terms
Mistake when reducing the terms to writing
typographical errors
-reasonable bystander test
Ambiguity - multiple interpretations of the same term
Mistake in assumptions
- refers to the subject matter of the contract
- mistake in the assumption as to the existence of the subject matter - K is void
Mistake in Identity
- often occurs in fraud situations
- person you engaged in contract with is lying about who they are
Mistake and innocent 3rd parties
-often occurs in fraud situations
A sells to F F sells to B F takes the \$\$ and moves to S. America A discovers mistake Who suffers the loss?
- If K is deemed void, then there was no K and therefore goods or money must be returned to A
- If K is deemed voidable, then there was a K and therefore goods or money stays with B
The innocent 3rd party must be that – innocent–
Must be a BFPVWN: Bona Fide Purchaser for Value Without Notice
Non Est Factum
Another type of mistake = “not my deed”
Claim of non est factum = this is not the contract i agreed to
reliance on another person’s word that the document contains the right terms agreed to
- works for blind and illiterate
- does not work for careless mistakes
Misrepresentation
a statement/representation made during negotiation of a contract, before formation of the contract, that turns out to be false
-can be innocent (R), negligent (R or S), fraudulent (R and S)
Elements:
1) Statement/Representation made
2) Statement is False
3) Intent (if fraudulent); Duty of Care owed/Standard breached (if negligent)
4) Reliance on the statement caused the injured party to enter the contract
5) Caused Harm
Omissions
- if you say nothing
- not a statement so it does not count
Undue Influence
domination of one party over the mind of another to such a degree that makes them unable to make a independent decision
-K under undue influence would be voidable at the choice of the victim
Special relationships
undue influence often arrises in situations where both parties have a special relationship with each other
ex. Husband and wife
- Need for ILA: Independent Legal Advice (separate from spouse)
Duress
actual or threatened violence or imprisonment as a means of coercing a party to enter a contract
Coercing: improperly forced payment
