ADMS 2610 Lecture : The Law of Contract - Chapter 11 - Failure to Create and Enforceable Contract

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purplewoodchuck173

23 Jan 2012

School

York University

Department

Administrative Studies

Course

ADMS 2610

Professor

Sam Ling

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Document Summary

Chapter 11 failure to create and enforceable contract. Mistake: mistake of law, mistake of fact, non est factum, unilateral and mutual mistake. Requirements for a valid contract: essential element such as offer, acceptance, intention, consideration, capacity may all exist but contract may still not be enforceable, situations which may render a contract unenforceable. mistake, misrepresentation, undue influence, duress: also determines who bears the brunt of a given loss. Mistake: a state of affairs in which a party (or both parties) has formed an erroneous opinion as to identity of subject matter, or some other important term, contract does not express their true intentions. Types of mistakes: mistake of law. exception: if statute provided for recovery: mistake of fact. mistake as to the existence of the subject matter of the contract or the identity of a party. Court may provide relief: mistake as to subject matter of contract.

Related Questions

Under which of the following conditions would the signing of a contract by Adam NOT be considered duress?
Answer
A. Ben holds a gun to Adam's head.
B. Ben is holding Adam on the ground threatening to beat him.
C. Ben threatens the entire criminal prosecution process against Adam, "When I finish with you, you'll be underneath the jail!"
D. None of the above, that is, ALL of the above examples would constitute duress by Ben upon Adam.

Andy Youngman called at the used car lot of Shearem & Co. and saw a 1979 automobile with $1000 painted on the windshield. Shearem lied to Andy telling him that the car was a 1980 model, but Andy knew that it was NOT because Andy knew the 1980 models were smaller. Is the contract voidable for Fraud because Shearem said it was a 1980 model?

Answer
A. YES
B. NO

In the above Question #31, was there an offer to sell the car for $1000?
Answer
A. YES
B. NO

Cindy purchases a sparkling stone from Sally for $20. At the time of contracting, neither party had any idea what the stone was. Later, when Sally is cleaning the stone before delivery to Cindy, she discovers that it is an uncut diamond worth $200,000. Based on the above situation:
Answer
A. Sally can have the contract rescinded on the basis of unilateral mistake.
B. Cindy can have the contract rescinded on the basis of unilateral mistake.
C. Either or each of the parties can have the contract rescinded on the basis of mutual mistake.
D. Neither party can have the contract rescinded on the basis of mutual mistake. This is an arms length transaction. The contract stands.

Edsel, an attorney, requests bids for built-in bookcases for his new office. Three contractors, Larry, Curley and Moe submit bids. The bids are $5300, $5100 and $520 respectively. Moe's bid of $520 was way off the mark, considering the specifications that were to be included in the bid. Edsel accepts Moe's bid. Moe then realizes his error and discovers his "missing zero" of his bid. His bid should have read "$5200". Based on the above situation, the contract is probably:
Answer
A. Not voidable; Moe would be forced to complete the contract at the accepted price.
B. Voidable, on the basis of mutual mistake.
C. Voidable on the basis of unilateral mistake.
D. Voidable on the basis of fraud.

Determine under what circumstances a contract should be allowed to be rescinded because of a unilateral mistake. Provide one example of a situation in which this could be acceptable.
Consider how guaranty contracts are used in business and propose two situations in which a guaranty would be required.

A contract (Points : 3)

must be in writing tobe an enforceable contract.
is an agreement thatcreates enforceable rights and obligations.
is enforceable if eachparty can unilaterally terminate the contract.
does not need to havecommercial substance.

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ADMS 2610 Lecture : The Law of Contract - Chapter 11 - Failure to Create and Enforceable Contract

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