Part 3 – The Law of Contract.pptVIP

Part 3 – The Law of Contract Chapter 11 Failure to Create an Enforceable Contract Overview Mistake Mistake of law Mistake of fact Non est factum Unilateral and mutual mistake Misrepresentation Innocent, fraudulent, negligent Undue Influence Duress Introduction Requirements for a valid contract Essential elements such as offer, acceptance, intention, consideration, capacity may all exists 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 the losses Mistake 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 Mistake Mistake of law Mistake of fact Mistake Mistake of Law Presumed to know the law Usually no relief provided 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 Mistake of Fact Court may provide relief Mistake as to subject matter of contract General rule contract is void Mistake as to identity of the Party Depends if the identity of the person is an essential element of the agreement If essential may not be enforceable If not essential – it will be enforceable Mistake of Fact Non Est Factum A defense 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 execution Narrow form of mistake Applies only to type of agreement being signed not to the terms of the agreement Unilateral and Mutual Mistake Unilateral Mistake A mistake by one party to the agreement Mutual Mistake A mistake where both parties have made mistaken assumptions as to the subject matter of the agreement Can be same mistake or different mistakes Courts will not enfor