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Lecture

Chapter9ReadingNotes.doc

7 Pages
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Department
Business
Course Code
BU231
Professor
Daniel J Fife

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1READING NOTESChapter 9 Grounds Upon Which a Contract May Be Impeached EndedMisrepresentation Undue Influence and DuressMisrepresentation and TortsMisrepresentations can provide a cause of action in both contract and tortThree types of misrepresentation1Fraudulent2Negligent3InnocentNote that an innocent misrepresentation becomes fraudulent or negligent if the party responsible fails to correct it when in a position to do soIn tort only 1 fraudulent and 2 negligent misrepresentation give rise to remedy recover loss from wrongdoerIn contract all three forms of misrepresentation allow for the remedy of recission oAs soon as any misrepresentation is found the court will provide recissionoBut in recission youre put back to how you started what if it involved an intangible product ie HamburgeroIf it had been a tangible product youd be able to return itMisrepresentation and ContractsIf a misrepresentation is innocent and material that is could be expected to influence a partys decision in favour of entering a contract a court may set the contract aside at request of innocent partyoRemedy is restricted to right to rescindoNeed to prove that a misrepresentation became a term o the subsequent contract in order for remedy based on breach of contractIf the maker of the misrepresentation acted fraudulently or negligently then the court will grant damages against the wrongdoerNoteThere is a general rule of law in that a plaintiff will not be granted a remedy he does not claimoThus if you sue for damages as a result of fraudulent or negligent misrepresentationyou may only receive damages and the contract will not be rescinded oIf you fail to prove fraud or negligence above you get nothingConsequences of Misrepresentation in ContractsWhen a party whos relied on an innocent misrepresentation learns the true facts they must renounce the agreement promptlyoIf you allow an unreasonable length of time to pass or take further benefits you lose your right to rescind
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