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Lecture 5

ACTG 2P40 Lecture Notes - Lecture 5: False Statement

4 pages43 viewsWinter 2013

Department
Accounting
Course Code
ACTG 2P40
Professor
Katharine Book
Lecture
5

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February 10, 2014
Chapter 8 – Impeaching Contracts: Misrepresentation, Undue Influence and Duress
Misrepresentation
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
Only breaches of the term form a breach of contract
Breaches of representation do not form a contract
Classification as Terms or Representations:
1) Stage of negotiations
2) Written contract
If something is that important than he will have written it in the contract
Parole Evidence Role – where you have a written contract it is only that which part
of the contract
3) Special skills or knowledge
If you have special knowledge or skill it is more likely to be a term
Cavear Emptor – buy beware
Anyone who is a purchaser, it is their responsibility to research and investigate to
satisfy themselves
If you make it impossible for the buyer to learn the problem, than there is no cavear
emptor
Did the buy do their due diligence?
4) Importance of statement
Importance to the buyer that it communicated to the seller
Looking for reliance
2. Types of Misrepresentation
a) Fraudulent Misrepresentation
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