Lesson7(L&E)Factors affecting the Contractual Relationship.pdf

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Law and Ethics Class 5 Factors affecting the Contractual Relationship
Factors Affecting the Contractual Relationship Misrepresentation Duress and Undue Influence Mistake Privacy of Contract Assignment
Misrepresentation A false statement that induces someone to enter into a contract. Misrepresentation must be a fact, not opinion or promise Silence is not misrepresentation unless there is duty to disclose Actively hiding information may be a misrepresentation. Partial disclosure may be a misrepresentation Misrepresentation must have misled the victim. Misrepresentation may be: Innocent Fraudulent Negligent
Innocent Misrepresentation An innocent misrepresentation is a false statement that is made honestly and without carelessness by a person who believed it to be true. Remedies- Rescission is the only remedy. In contract law, rescission is an equitable remedy which allows a contractual party to cancel the contract. Done to bring parties back to their original position before they entered the contract.
Innocent Misrepresentation-Contd. Situations where Rescission not available:. Affirmation- Where the person used the proceeds of transaction when he/she knows about the misrepresentation. Restoration impossible- where the subject matter is destroyed or damaged. Third party involved- Adverse impact on third party
Fraudulent Misrepresentation If the misrepresentation of fact is intentional and induces another person to enter into a contract. Victim can sue for damages under tort of deceit in addition to rescission.

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