Chapter 8 - Factors Contracts

Question 1

Misrepretentation

Answer 1

false statement of fact that persuades someone to enter into a contract

statement must be an allegation of fact or an opinion by an expert

statement must be untrue and must have been the inducement that led to the contract

plaintiff must be misled into doing something they otherwise would not have done

Question 2

innocent misrep

Answer 2

person making statement honestly believes it to be true

remedies limited to rescission

Question 3

recsission

Answer 3

puts both parties back into original positions

Question 4

rescission of contract is not available when:

Answer 4

contract is affirmed
impossible to restore
where a third party is involved
where plaintiff does not have clean hands

Question 5

fraudulent misrep

Answer 5

false statement was made knowingly
without belief in its truth
recklessly - not caring if t/f

Question 6

remedies for fraudulent misrep

Answer 6

recsission or damages for deceit

Question 7

negligent misrep

Answer 7

carelessly providing false info

must establish ABCD

Question 8

undue influence

Answer 8

pressure from trusted person or position of power to enter contract
more subtle than duress
contract is voidable

Question 9

court may find undue influence

Answer 9

presumption based on special relationships
presumption based on unique characteristics
determined by facts - must show development of relationship of trust and that trust was abused

Question 10

unconscionable transactions

Answer 10

permits the court to set aside a contract in which one party has been taken advantage of

agreement must be unreasonable to be unconscionable

Question 11

must show in unconscionable trans that

Answer 11

bargaining positions of parties are drastically unequal
one party uses position of power to gain advantage
agreement is substantially unfair to weaker party

Question 12

mistake

Answer 12

error that destroys consensus

Question 13

reviewable mistakes can relate to

Answer 13

the major terms of the contract
as assumption upon which the contract is based (fact, future event, the law)
expected result or consequence of the agreement

Question 14

shared mistake

Answer 14

when two parties are in agreement but have made the same mistake regarding some aspect of the contract

must be a fundamental mistake about subject matter of contract

Question 15

rectification of shared mistake

Answer 15

courts will correct obvious error - if what was written was different from the understanding

Question 16

misunderstanding

Answer 16

neither party is aware of the other partys misunderstanding about the terms of the agreement

Question 17

how to correct misunderstanding

Answer 17

reasonable person test for the correct interpretation of the contract

if 2 interpretations are equally reasonable then the contract is void

Question 18

one sided mistake

Answer 18

occurs where only one of the parties to the contract makes a mistake interpreting contract

Question 19

caveat emptor

Answer 19

unilateral mistake usually not relieved by the court in the absence of misrep

Question 20

non est factum

Answer 20

“it is not my act”
mistake goes to the very nature of the document

relief is to rescind contract

pleading negligence often defeats defence of non est factum

Question 21

rules of interpretation

Answer 21

reasonable person test

literal or liberal meanings imposed on written terms

Question 22

parol evidence rule

Answer 22

outside evidence will not change clear wording

Question 23

privity of contract

Answer 23

only affect parties to it

Question 24

novation

Answer 24

the process of substituting an existing contract with a replacement contract, where the contracting parties reach a consensu

Question 25

assignment

Answer 25

person entitled to receive a benefit under a contract can transfer that benefit to a third party

obligation cannot be assigned

vicarious performance

Question 26

vicarious performance

Answer 26

contractual obligation can be performed by others - original party remains responsible for the work

Question 27

statutory assignment

Answer 27

do not have to sue in assignors name

Question 28

qualification for statutory assignment

Answer 28

absolute and unconditional assignment
must be in writing and complete
must give proper notice

Question 29

what cannot be assigned

Answer 29

right to support payments
right to sue another in a tort action - assignment of proceeds of law suit may be assigned
workers compensations benefits

Question 30

involuntarily assignment of contractual rights are automatic:

Answer 30

death - to the executor/administrator
bankruptcy - to the trustee in bankruptcy