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Comm Exam Chapter Notes.docx

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University of Waterloo
COMM 231
Joseph Radocchia

COMM 231 EXAM CHAPTER NOTES CHAPTER 8The Narrow Meaning of Mistake Only certain kinds of mistakes will make a contract void or voidable and thereby qualify for equitable relief oVoid the contract never comes into existence and no rights passoVoidable the contract exists until set aside by a court rights may pass to third parties before it is set asideoEquitable relief a discretionary remedy first developed by the courts of equity to undo an injusticeIf an mistaken party cannot restore the subject matter of the contract to the other party for instance the goods have been consumed or have substantially deterioratedthe mistaken party loses the right to rescind oRescind set aside undo or revoke a contract and return the parties as nearly as possible to their original positionsVoid and Voidable ContractsIn contrast to void contracts voidable contracts exists until they are set aside by the court oSet aside rescind undo or revoke a contract and return the parties as nearly as possible to their original positions The difference between void and voidable contracts does not matter if the goods are still in the possession of the original parties when the contract is set aside But the goods have been conveyed to an innocent third party prior to the contract being set aside then the consequences of void and voidable contracts are quite differentThe courts of equity thought that taking the goods away from a subsequent purchaser was too harsh in some circumstances and so created a category of mistakes that only render a contract voidable allowing a subsequent innocent purchaser to keep the goods even when the first contract is rescindedoRescissionan equitable remedythat rescinds a contract In order to receive protection a third party purchaser must be innocent and have paid the value of the goodsMistakes about the Terms
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