Contracts

Question 1

Misunderstanding

Answer 1

A misunderstanding occurs when the parties to a contract attach different meanings to the same term. If the misunderstanding involves a material term, most often there is no contract because there is no meeting of the minds. But if one party knows or has reason to know about the misunderstanding, then a valid K will be formed based on the meaning of the term as understood by the unknowing party.

Question 2

Misrepresentation

Answer 2

Misrepresentation is an untrue assertion of fact made during contract negotiations. This renders the K voidable by the adversely affected party if:
1. Misrepresentation was fraudulent or material
2. Misrepresentation induced assent tot he K (presumed for material misrepresentations)
3. Adversely affected party justifiably relied on the misrepresentation