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Lecture 8

ACTG 2P40 Lecture Notes - Lecture 8: Contributory Negligence, Credit Union, False Imprisonment

5 pages87 viewsWinter 2018

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5 Short answer (10 marks)
5 Long answer (10 marks) bigger concepts
Bullet points are fine
Chapter 8: Impeaching Contracts: Misrepresentation, undue influence, and duress
Misrepresentations it is not a breach of contract argument. It was a term that was important that
they should let you off the contract. It is intended to make up for circumstances, that even if it
was important that you can get out.
1. Representations vs Terms in a Contract
- Term: obligations which govern the contractual relationship
- Representation: statements of fact or opinion made during the formation of contract
- Terrible tutor, not breach of contract. Strong enough to cut off steel, term of contract?
Or representation? What sort of price did they agree to?
- Misrepresentation is to give remedy that the keeping the person on the contract will be
Classification as Terms or Representations:
1. Stage of negotiations
Parole Evidence rule: consider terms of the written contract itself. Negoitation that were different
from the written document, it will not be considered.
- Said at the end of a nego.
2. Written contract
3. Special skills or knowledge due diligence: to be satisfied to think that they are getting
what they are getting. Cannot get out of the deal caveat emptory: obligation as the
buyer to ask everything about the house and get an inspection. The seller cannot lie. The
purchaser’s responsibility to make sure that the product is in good condition. The court will
not help you, “ you should have helped yourself”
- Due diligence: reasonable steps taken by a person in order to satisfy a legal
requirement, especially in buying or selling something.
- Eery part is origial, you ay ot e ale to hek those fats  those people hae
that skill or professional experience so u assume is correct.
4. Importance of the statement
The less important it is, the more it is not misrepresentation.
Negligence Misrepresentation- negligence ** EXAM
2. Types of misrepresentation
a. Fraudulent Misrepresentation: False statement made with the knowledge it was
false or with reckless disregard for its truth which is intended to be acted upon.
It is clearly important and they know so that it gets you into the bargain. Difficult
to prove. E.g. company puts up for sale bc they are losing money, financial
statement is wrong bc accountant says they are making money. They hand over
statement where buyer thinks they are making money, but they are not. Hard to
prove bc they did not. Reckless disregard for the truth: how could you be losing
money and the statement says you are making money. It does not make sense
and they should have investigated for it.
- Rescission: the revocation, cancellation, or repeal of a law, order, or agreement.
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- Punitive damages: punishment damages- only for this type of misrepresentation
- There was an intention to mislead or did not care that they were misleading the person
b. Innocent Misrepresentation*** Exam (bc most common) & Assignment
Representation which turns out it be false where the party made the statement honestly and to the
best of their knowledge believed it to be true. They were just misinformed. Harder to undo a
contract. There is a four part test to get rescission
1. Misrepresentation must be a statement of fact, cannot be an opinion. Statement of
opinion cannot form misrepresentation. Must determine whether the person had
the knowledge of making this mistake. E.g. you need to perform the due diligence-
cannot rely on the other person if you have the ability to check those facts. Joe says I
sell you 20 papers, ut does’t. You a hire your o perso ad you hae to do
that. If you do’t do that or lear the fats, the the ourt ill ot help you. A
person lies about the fact that you cant check because they have special knowledge
of the circumstance.
2. Statement of fact and is false
Material- if you knew about it at first then you would not have entered the contract
from the beginning. It was so important. You have communicated it to the other
side. They knew that you relied on the information.
Silence cannot be misrepresentation because there is no obligation. There is no
misrepresentation if you did not provide the facts.
Fact is it was impossible for them to find out the truth because they hid it. E.g.
brought house with paper that hid cracked walls. How can they conduct their
convent. Rescission: restore the person to how they were originally.
3. Statement must be inducement to the contract (material)
4. Statement must be intended to be acted upon
a. Negligent Misrepresentation
Representation which turns out to be false where the party was under a duty to make the
statement and made the statement honestly but negligently i.e.- false information given because
the party failed to take enough care.
- Statement that is false, not lying, but the information was given negligently, if they did
their job properly then they would not have given the wrong statement. It is only used if
there is a duty to not make mistakes. E.g. Write to the city- frequently checks building.
City said that everything is good, lent money. Next door neighbour said they cannot put
a building that tall, combustible material, and did not have proper fire flow. Contractor
goes bankrupted. Credit union have to rip off top floor and bring water and change the
drive way. They can sue the city because they told them that the building was good
when it was not. If they had done their job properly then it would have been prevented.
3. Bars to rescission- you can lose your rescission
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