Law & Society I
M W 9:30AM, Snell 213
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John Exley, ID: 0160294
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Chapter 14: Mistakes, Fraud, and Voluntary Consent
In this chapter, we examine the kinds of factors that may indicate a lack of voluntary consent.
Section 1 – Mistakes
Only a mistake of fact may allow a contract to be avoided.
Mistakes of Fact
Bilateral (Mutual) Mistakes of Fact
A bilateral (or mutual) mistake occurs when both parties are mistaken as to an existing
(that is, a fact important to the subject matter of the contract)….When a bilateral mistake
occurs, normally the contract is voidable by the adversely affected party and can be rescinded, or
Unilateral Mistakes of Fact
A unilateral mistake occurs when only one of the contracting parties is mistaken about a material
fact. Generally, a unilateral mistake does NOT afford the mistaken party any right to relief from
the contract and the contract is normally enforceable. …There are at least
exceptions to the
, if the
party to a contract knows or should have known that a mistake of fact was
made, the contract may not be enforceable.
exception arises when a unilateral mistake of fact was due to a mathematical mistake
in addition, subtraction, division, or multiplication and was made inadvertently and without gross
Mistakes of Value
If a mistake concerns the future market value or quality of the object of the contract, the mistake
is one of
, and the contract normally is enforceable. Mistakes of value can be bilateral or
unilateral but do not serve as a basis for avoiding a contract either way.
…Each party to a contract is considered to have assumed the risk that the value will change in
the future or prove to be different from what he or she thought. Without this rule, almost any
party who did not receive what she or he considered a fair bargain could argue
Section 2 – Fraudulent Misrepresentation
When an innocent party is fraudulently induced to enter into a contract, the contract normally can
be avoided because that party has not
consented to its terms.
Typically, fraudulent misrepresentation consists of the following elements: