Textbook Notes (368,117)
Canada (161,660)
MGSC30H3 (57)
H Laurence (33)
Chapter 11

Chapter 11 Notes

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Management (MGS)
H Laurence

Chapter 11 Failure to Create an Enforceable Contract NotesMistake y if in their negotiations the parties are mistaken as to some essential term in the agreement they may have failed to create a contract y mistakea state of affairs in which a party or both parties has formed an erroneous opinion as to the identity or existence of the subject matter or of some other important term y this may occur when the parties have formed an untrue impression concerning an essential element or when they have failed to reach a true meeting of the minds as to a fundamental term in the agreement Mistake of Fact y mistake of factmistake as to the existence of the subject matter of a contract or the identity of a party y as a general rule if the parties are mistaken as to the existence of the subject matter of the contract then the contract will be void y a second type of mistake of fact applies when there is a mistake as to the identity of one of the contracting parties y this is an extension of the rule for offer and acceptance which states that only the person to whom an offer is made may accept it y with this form of mistake of fact the courts will generally look at the offer to determine if the identity of the person in question is an essential element of the contractif it not then the agreement may be enforceable y however if one party to the contract does not wish to be bound in an agreement with a particular contracting party and is misled into believing that he or she is contracting with someone else the contract may be voidable when the true facts are discovered Non Est Factum y non est factuma defence that may allow illiterate or infirm persons to avoid liability on a written agreement if they can establish that they were not aware of the true nature of the document and were not careless in its execution y the signed document must be completely different in nature from the document that the party believed he or she was signing for a plea of non est factum to succeed y if however the document is not of a different nature but rather the same type of document as described differing only in degree then a defence of non est factum would be unsuccessful y the justification for this rule of law is obvious public policy dictates that a person should be bound by an agreement signed the excuse that it was not read before signing is essentially an admission of carelessness or negligence on the part of the signor Unilateral and Mutual Mistake y unilateral mistakea mistake by one party to the agreement y mutual mistakea mistake where both parties have made mistaken assumptions as to the subject matter of the agreement y the major difficulty with this form of mistake is establishing a general rule for its application y the best that might be said in this instance is that courts tend to treat contracts as being unenforceable when a party makes or accepts an offer that he or she knows the other party thinks or understands to be materially different from what he or makes or accepts y rec
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