invalidity, void and voidable contracts

Question 1

restitutio integrum meaning

Answer 1

You must be able to put both parties back to their original position.

Question 2

case; restitutio integrum

Answer 2

Boyd & Forrest v Glasgow Railway (1915):
* Boyd & Forrest, contractors, agreed to build a railway for Glasgow & South Western Railway Co.
* The contract was based on plans and soil reports provided by the railway company.
* These reports falsely stated that the ground conditions were stable and suitable for construction.
* Fraudulent misrepresentation
Restituto integrum was no valid

Question 3

case; contract invalidity due to threat = void

Answer 3

Earl of Orkney v Vinfra (1606) – signed under “just fear” from being forced.
* Vinfra was forced to sign an agreement in favour of the Earl of Orkney.
* The Earl used threats and intimidation to compel Vinfra to sign.
Vinfra did not willingly consent to the contract — he only agreed out of fear

Question 4

void meaning

Answer 4

no valid consent= gun to head

Question 5

voidable meaning

Answer 5

some consent applied by threat or pressure

Question 6

types of error that can void a contract

Answer 6

Error which prevents formation of the contract Uninduced mutual/shared error
Uninduced unilateral error – sometimes voidable\
Induced error (best analysed as misrepresentation)

Question 7

case; error which prevents formation of the contract

Answer 7

• Morrison v Robertson 1908 SC 332
  ○ Morrison purports to sell cows to Telford

    ○ Telford had lied and said he was the son of Wilson, and was buying the cows on Wilson’s behalf
  
    ○ Telford didn’t pay, court held that there was no contract
  
    ○ Telford had tried to sell on to Robertson, but Morrison able to reclaim cows

Question 8

what is a uninduced shared error?

Answer 8

both parties made the same honest mistake about something important in the contract, and neither party caused the mistake

Question 9

what is a Uninduced unilateral error?

Answer 9

one party made a mistake, but the other party didn’t cause or know about the mistake.

Question 10

what is induced error?

Answer 10

one party made a mistake because the other party gave false or misleading information

Question 11

terms for misrepresentation

Answer 11

If there’s a special relationship of trust (like between a solicitor and client), honesty is required.
In contracts needing full honesty (like insurance or partnerships), all important facts must be shared.
If someone says something they believe is true, but later learns it’s wrong, they must correct it—not doing so can count as fraud.
If a person gives a half-truth (only part of the story), that can also mislead and be treated like dishonesty.

Question 12

types of misrepresentation and what happens when they occur

Answer 12

• Innocent Misrepresentation (unintentional and not negligently made):

    ○ contract avoided and price restored, provided restitutio in integrum is possible 
  	
    ○ (It can thus be seen that where restitutio in integrum is not possible, a party who has suffered through an innocent misrepresentation may be left without a remedy.)

• Fraudulent Misrepresentation (deliberate):

    ○ contract avoided and price restored, provided restitutio in integrum is possible
  	
    ○ Can sue for damages in delict, but must show the misrepresenter knew statement was false, or believed it was false and was recklessly indifferent to whether it was true or false. 

• Careless misrepresentation:

    ○ contract avoided and price restored, provided restitutio in integrum is possible
  	
    ○ Can sue for damages in delict, but must show the misrepresenter owed them a duty of care, and broke it by carelessly making false statement.