Term
| Five Types of contracts Voidable in equity due to inequity of enforcement: |
|
Definition
1. Mutual Mistake of Fact: Voidable by any party
2. Material misrepresentation: typically voidable by the deceived person
3. Duress: typically void under state law
4. Undue influence: typically voidable by the person
5. Unconsciounability: voidable by the person |
|
|
Term
|
Definition
| A court cancels the contract and each party must receive the status quo (e.g., give back $ or property to return the other party as closely as possible to the pre-contract situation or status quo) |
|
|
Term
|
Definition
| If there is an oral agreement of the parties and a mistake in writing it up (scrivener's error), the court revises the contract to conform to the actual agreement (problem is proof) |
|
|
Term
| Misrepresentation - Types of Remedies (Innocent) |
|
Definition
| Mistake without fault -> recession only |
|
|
Term
| Misrepresentation - Types of Remedies (Negligent) |
|
Definition
| Mistake because of failure to use reasonable care -> rescission or actual damages |
|
|
Term
| Misrepresentation - Types of Remedies (Fraudulent) |
|
Definition
| Actual and punitive damages on one hand or rescission on the other |
|
|
Term
|
Definition
| Victim is told he's signing something else |
|
|
Term
|
Definition
| Deception as to the understood subject matter of contract, not as to document itself (voidable) |
|
|
Term
| Misrepresentation of a material fact |
|
Definition
1. Material -> important to deal
2. Must be misrepresentation of past of present material fact; not expression of opinion, future event, value, general quality, or legal opinion |
|
|
Term
| Three exceptions -> a misrepresentation of fact is unnecessary for fraud if there is: |
|
Definition
1. An opinion misusing a position of trust, such as where there is a confidential relationship between seller and buyer
2. A seller's opinion where seller has superior knowledge upon which seller expects reliance
3. Concealment of serious defect of which seller knows but buyer has no reasonable way of finding out |
|
|
Term
| Fraud in the Inducement: Intent to deceive by the defendant |
|
Definition
1. Defendent has knowledge of falsity or
2. Defendant has reckless disregard for the truth: making a statement at a time when the speaker has serious doubts about the truth of it. |
|
|
Term
| Fraud in the Inducement: Reliance |
|
Definition
| There must be justifiable (reasonable) reliance by the plaintiff |
|
|
Term
| Fraud in the Inducement: Injury to Plaintiff |
|
Definition
| If seeking monetary damages, must prove monetary loss |
|
|
Term
| Three elements of Duress: |
|
Definition
1. An unlawful or wrongful threat
2. Causing involuntary acceptance
3. Because circumstances permit no alternative |
|
|
Term
|
Definition
| Duress involves coercion undue influence, wrongful persuasion |
|
|
Term
| Three Elements of Undue Influence: |
|
Definition
1. Confidential, family, or trust relationship
2. Weaker party lacked free will because of influence
3. A contract results between the parties |
|
|
Term
Unconscionability - Contracts which are grossly unfair
Three elements to Prove... |
|
Definition
1. Unequal bargaining power (usually consumer, not commercial)
2. Dictation of terms of contract by stronger party -> an Adhesion Contract
3. Terms manifestly unfair or oppressive |
|
|
