lecture four Flashcards
Grounds for challenging validity
- Capacity (void)
- Force and Fear (voidable)
- Facility and Circumvention (voidable)
- Undue Influence (voidable)
- Error and Misrepresentation
How to annul?
- Intimating to the other party
- By judicial decree
What about third parties?
Third parties who acquire rights in good faith and for value before annulment are protected (McLeod v Kerr 1965 SC 253).
Requirement for annulment:
- Restitutio in integrum must be possible (Western Bank of Scotland v Addie)
- The contract must not have been affirmed.
- No delay
Force and fear
Fear, not force, is the true basis for reduction—force is just one way to induce fear (Priestnell v Hutcheson (1857) 19 D. 495).
Facility and circumvention
(Mackay v Campbell 1967 SC (HL) 53):
1. Weakness and Facility (e.g. age, illness, distress),
2. Circumvention (deceit or pressure),
3. Loss (disadvantage)
Presumption of undue influence
Matossian v Matossian and Matossian [2016] CSOH 21 (parent and child)
Types of error
- Error preventing agreement (dissensus) – void
- Uninduced mutual error – void
- Uninduced unilateral error – sometimes voidable
- Induced error/misrepresentation – voidable
Uninduced mutual error
Hamilton v Western Bank
Uninduced unilateral error
Steuart’s Trustees v Hart
Induced error
Flynn v Scott
Innocent misrepresentation
Contract avoided and price restored
Fraudulent misrepresentation
Can sue for damages
Careless misrepresentation
Must show the misrepresenter owed them a duty of care
