Vitiating Factors Flashcards

Question

What are the three categories for Misrepresentation?

Answer 1

1) False statement of fact 2) From 1 party to another 3) Inducement

Answer 2

1. False statement of intention However, a statement of intention to a future action can be a false statement of fact if the representor did not intend hold that intention at all. (Edgington V Fitzmaurice - A company issued a prospectus stating that the money raised was used to improve buildings when the real intention was to pay off some debts. The stated intention was not held, hence it was a misrepresentation) 2. Representor had access to the facts If the representor had access to the relevant facts and has no reasonable ground to hold such an opinion, his statement of opinion can be a false statement of fact. (Bisset V Wilkinson - A seller of a farm which was never used to raise sheep told the buyer that the farm could sustain 2,000 sheep when in fact, the farm cannot do so. Seller has no access to facts and The statement was only an opinion of the capacity of the farm.) 3. Silence Silence does not amount to misrepresentation as representor has no duty to disclose information (Keates V Lord Cadogan - The defendant’s house was in poor condition and he kept silent about it when Keates wanted to rent it.) Exception 1: Half Truth (Dimmock V Hallett - If the seller of a land tells the buyer that the land is fully let and did not mention that the tenants were given notice to quit, the unsaid fact becomes a misrepresentation.) Exception 2: Change in circumstances (With V O' Flanagan - Dr O’Flanagan said truthfully that his medical practice had takings of £2000 pa. However later on, the takings were only £5 a week because O’Flanagan had become ill. The contract was signed with With to buy the medical practice, but O'Flanagan did not disclose the change in circumstances.) Exception 3: If the law imposes a duty to disclose facts, any form of silence would constitute a misrepresentation. ( Fiduciary contracts of insurance)

Answer 3

1) False statement of fact 2) From 1 party to another 3) Inducement

Answer 4

As long as the false statement is one of the inducing causes, it amounts to a misrepresentation. Even if the representee has the opportunity to investigate the truth, it still amounts to a misrepresentation. Redgrave V Hurd - When Redgrave sold his house together with his law practice to Hurd, Redgrave had misrepresented the value of his practice. Although Hurd had the opportunity to check, he didn’t do so. The opportunity to check did not deprive Hurd of his right to rely on the misrepresentation, hence there was a misrepresentation. Exception: If the representee has come to learn of the misrepresentation before entering into the contract, or does not rely on the misrepresentation to enter into the contract, the false statement would not be the inducing cause.

Answer 5

1. Fraudulent Misrep If the representor knows that the statement was false, the misrepresentation is then a fraudulent one. As set under Derry V Peek, for a misrepresentation to be fraudulent, it must be either be made knowingly, be made without belief in its truth, be made carelessly or recklessly whether it be true or false 2. Negligent Misrep If the representor made the false statement without due care, it is then a negligent misrepresentation. (HOWARD MARINE V OGDEN (1978) Ogden chartered barges from HM to dispose soil into the sea. HM stated the wrong holding capacity for the barges as they had based it on the wrong register. HM had no reasonable grounds to believe the stated figures when he could have checked the shipping documents. Hence HM is liable for negligent misrepresentation.) 3. Innocent Misrep If the representor made the false statement believing that the statement is true, it is then an innocent misrepresentation,

Answer 6

1. Damages For fraudulent misrepresentations, damages will be awarded under the law of tort of intentional conduct. For negligent misrepresentations, the representee will be awarded damages for all losses caused by the misrepresentation, which are not too remote. (For example, a tenant and a landlord contract. The landlord makes a negligent misrep saying the sewages are clean when in fact it is not. As a result, the tenant’s poultry died and his manager got sick.) 2. Indemnity For innocent misrepresentation only, an indemnity can be awarded to the injured party to help restore him to the position he was beforehand. ( For example, a tenant and a landlord contract. The landlord makes a negligent misrep saying the sewages are clean when in fact it is not. As a result, the tenant’s poultry died and his manager got sick.) 3. Rescission A rescission is the restoration of both parties to their original positions before the contract was set. The representee must give reasonable notice to rescission. Once the representee elects to terminate the contract, the contract is rescinded. Rescission is final and cannot be withdrawn. Rescission is not available when the contract is affirmed by the representee, a reasonable amount of time has lapsed since the discovery of misrepresentation, the parties cannot be restore to their original positions

Answer 7

1. Common: Common mistake occurs when both parties to the contract make the same fundamental mistake. (Couturier V Hastie) 2. Mutual: Mutual mistake occurs when the parties misunderstand each other and are at cross purposes. 3. Unilateral: Only when one party is mistaken (Chwee Kin Keong V Digilandmall.com) 4. Non Est Factum (It is not my deed) ”. Arises when a person signs a document that is fundamentally different in character from that which he contemplated. (Lee sire Chun V Sourgrapes) To avoid contract on this basis, the plaintiff must show the document signed is radically different from that which he intended to sign, he had not been careless in signing the document. he took such care as a person in his position ought to have taken

Answer 8

1. Duress 2. Undue Influence 3. Unconscionable Bargain

Answer 9

1. Duress: If a person is forced to enter into a contract as a result of actual violence or threats of actual violence, the contract would be unenforceable. Economic Duress refers to unlawful or illegitimate commercial pressure. (Atlas Express V Kafco) Criteria for economic duress: 1) Whether the defendant did or did not protest 2) Whether, at the time of coercion, the defendant had an alternative course open to him such as an adequate legal remedy 3) Whether the defendant was independently advised 4) Whether after entering the contract, the defendant took steps to avoid it

Answer 10

1. Duress: If a person is forced to enter into a contract as a result of actual violence or threats of actual violence, the contract would be unenforceable. Economic Duress refers to unlawful or illegitimate commercial pressure. (Atlas Express V Kafco) Criteria for economic duress: 1) Whether the defendant did or did not protest 2) Whether, at the time of coercion, the defendant had an alternative course open to him such as an adequate legal remedy 3) Whether the defendant was independently advised 4) Whether after entering the contract, the defendant took steps to avoid it The party must objected in the first place and take steps asap to avoid changes. If not they lose their right (North Ocean Shipping V Hyundai Construction) 2. Undue Influence:Undue influence is the unconscientious use of one’s power or authority over another to obtain a benefit or achieve a purpose by exerting improper pressure. 2 Types of undue influences : 1) Undue influence must be actually proven 2) By virtue of the relationship between the parties, the law automatically presumes that undue influence is present and the burden of proof is then on the party complained of having exercised undue influence to show that no undue influence in fact has been exercised. Undue influence is also presumed in some relationships like solicitors and clients, doctors and patient LIM GEOK HIAN V LIM GUAN CHIN (1994) Brother and sister is not presumed and must be proved. 1) To establish undue influence, the person who raises the complaint must establish the following: a. that the other party had the capacity to influence the complainant b. the influence was exercised c. its exercise was undue d. its exercise brought about the transaction 2) When it is presumed, the presumed party has the burden of proving that there is no undue influence. 3) Unconscionable Bargain : Vague concept suggests that any agreement which is manifestly inequitable and constitutes an unconscionable bargain should be set aside.This can be an exception under Singapore law and does in fact constitute a vitiating factor for contracts involving performance bonds.

Answer 11

1) Whether the defendant did or did not protest 2) Whether, at the time of coercion, the defendant had an alternative course open to him such as an adequate legal remedy 3) Whether the defendant was independently advised 4) Whether after entering the contract, the defendant took steps to avoid it

Answer 12

1) Undue influence must be actually proven 2) By virtue of the relationship between the parties, the law automatically presumes that undue influence is present and the burden of proof is then on the party complained of having exercised undue influence to show that no undue influence in fact has been exercised.

Vitiating Factors Flashcards

(36 cards)