Chapter 14 Voluntary Consent

Disaffirms

(denies the validity of)

Mutual VS Unilateral

(Mutual) Depends on whether both or only one of the parties was acting under a mistaken belief about a material fact. Mutual mistake is always a basis for granting rescission of the contract at the request of either party. (Unilateral) if only one of the parties to the agreement is acting under a mistaken belief, this is not grounds for rescission. The reasoning behind the rule is that the law does not want to give all people who want to get out of a contract an easy exit y allowing them to argue mistake.

Justifiable Reliance

2 Ideas: - casual connection between a misrepresentation and the complaining party's entry into the contract. - Parties who enter a contract must take reasonable steps to discover the facts about the contracts they enter into.

Material Fact

A fact that would be to a reasonable person germane to the decision to be made as distinguished from an insignificant, trivial or unimportant detail. In other words, it is a fact which expression (concealment) would reasonably result in a different decision.

Rescind

As the word is applied to contracts, to rescind in some cases means to terminate the contract as to future transactions, while in others it means to annul the contact from the beginning.

Knowledge of Falisity

Based on the long-standing equitable principle that one who makes a statement bears the risk of its truth.

Voidable

Capable of being made void; not utterly null but annulled, and hence, that may be either voided or confirmed.

The Remedy

Contracts entered into as a result of misrepresentation, fraud, duress, undue influence, and certain kinds of mistakes are voidable. The injured party (or parties) may rescind (cancel) the contract.

Voluntary

Even if the facts and circumstances surrounding a case indicate that the parties reached an agreement, that agreement must be voluntary to be enforceable. (to be valid)

Fraud in the Execution

Involves misstatements about the content or legal effects of something usually contained in a form or preprinted contract.(ability to read, don't have glasses, don't have the ability to read)

Scienter

Refers to the mental state of the defendant.

Determinant

The courts do not allow a person who claims to have been victimized by a misrepresentation to cancel the contract unless he or she can show some determinant (injury) as a result of the misrepresentation.

Fraud by Silence

The original common law position on this issue was caveat emptor (let the buyer beware) The seller could remain silent without being found guilty of fraud, the duty was therefor placed on the buyer. Today however, many courts deem it unfair results. Generally this duty is limited to material facts.

Misrepresentation

ordinarily given as a misrepresentation of a material fact justifiably relied on to the detriment of (causing harm to) the person relying. ( false statement)

The Nature of a Mistake

used in contract law to describe the situation in which one or both the parties to an agreement acted under an untrue belief about the existence or nonexistence of a material fact.