BTF1010 Chapter Notes - Chapter 3: Rescission, Undue Influence
6 Jun 2018
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Department
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Professor
Genuine Consent
If one of the following elements is present, there is no genuine consent and the contract may be rescinded by
the innocent party
• Mistake of a fundamental kind
• Misrepresentation
• Duress
• Undue influence
• Unconscionable conduct
Mistake
Common mistake
• As to the existence of a fundamental fact
• If operative, contract is void (cancelled)
• Case: Leaf v International Galleries
• There was a mistake about the quality of the subject matter as both parties believed the same thing
and the mistake was of a fundamental fact
• Plaintiff was not able to sue as too much time had lapsed
• In the event of lapse of too much time between the making of the contract and the decision to rescind,
the right to rescind is lost
Mutual Mistake
• No agreement. Parties at cross-purposes.
• If operative, contract is void (cancelled)
• Case: Raffles v Wichelhaus
Unilateral mistake
• Only one person mistaken about: fundamental term/unconscionable conduct
• If operative, contract is voidable (a contract that is valid and binding unless avoided or declared void
by a party to the contract who is legitimately exercising a power to avoid the contractual obligations)
Document Summary
If one of the following elements is present, there is no genuine consent and the contract may be rescinded by the innocent party: mistake of a fundamental kind, misrepresentation, duress, undue influence, unconscionable conduct. Common mistake: as to the existence of a fundamental fact. In the event of lapse of too much time between the making of the contract and the decision to rescind, the right to rescind is lost. If operative, contract is void (cancelled: case: raffles v wichelhaus. Unilateral mistake: only one person mistaken about: fundamental term/unconscionable conduct. Instead it will make it voidable in equity if the unmistaken party has acted unconscionably rescission is possible: mistake as to the nature of the document signed (non est factum) Terms (promissory: no legal consequences, if wrong, consequences depend on type of representation, if breached, consequences depend on kind of term. Vitiating factor: may allow the contract to be avoided. Remedy: damages or recession of contract: pre-contractual statements.
