Capacity and Consent

To rescind for unilateral mistake a party must

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To rescind for unilateral mistake, a party must demonstrate that he entered the contract of a basic factual error and that either Enforcing the contract would be unconscionable The non-mistaken party knew of the error ex/ 2 engineers bid on a building. Engineer b made a mistake on a excavation fee. He can void the contract Duress and Economic Harm If one party makes a threat that causes the victim to enter into a contract, with no reasonable alternative, the contract is voidable Courts look at these factors Acts that have no legitimate business purpose Greatly unequal bargaining power Financial distress for one party Unnaturally large gain for one party
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Threats to get someone to do something Undue Influence Prove there has been undue influence, one must demonstrate Relationship between the two parties either of trust or of domination, and Improper persuasion by the stronger party Misrepresentation and Fraud To rescind a contract based on misrepresentation or fraud, party must show three things False state of fact; puffery(exaggerated “sales talk”) is not a statement of fact. Statement was fraudulent Plaintiff’s remedy for misrepresentation or fraud If maker’s statement is fraudulent, injured party generally has a choice of rescinding the contract or suing for damages Special problem: Silence Nondisclosure of a fact is misrepresentation only when the disclosure is necessary: In a relationship of trust To correct previous assertion
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