Law of Contract II - Enforcement of Contracts

Flashcards about contract law, focusing on the validity and enforcement of contracts, vitiating factors, mistake and common law

Vitiating Factors

Circumstances that undermine the validity of a contract.

Illegality and Public Policy

Contracts that are illegal or contrary to public policy that are generally unenforceable.

Discharge of Contractual Obligations

The termination of contractual obligations, releasing parties from further performance.

Vitiating Factors in Contract Law

Factors that negate or undermine a contract's apparent consent.

Mistake (Contract Law)

Being wrong as to a matter of fact that influences the formation of a contract.

Void Contract

A legal nullity, unenforceable at law and deemed by the courts to have never existed as a contract.

Void Ab Initio

At Common Law, the legal effect of a mistake is that it renders the contract void from the beginning.

Voidable Contract

The contract is valid and enforceable until either party disaffirms or rescinds it.

Operation of Mistake in Equity

Mistake can be a defense in an action for specific performance, or may entitle parties to have a written contract rectified, or be a ground for rescission of a contract.

Mutual Mistake

Both parties make different mistakes.

Unilateral Mistake

One party makes a mistake.

Common Mistake

Both parties make the same mistake.

Objective Test

Courts apply this to determine whether a contract should be held despite a mutual mistake.

Acceptance with Knowledge of Mistake

The law will not recognize that a contract has come into existence if an offeree accepts an offer which he knows or ought to have known does not represent the real intention of the offeror.

Offer to a Particular Person

Where an offer is made to a particular person, the offer can only be accepted by the person to whom it is addressed.

Mistake as to Identity (Void Contract)

A resulting contract is deemed void where a mistake as to the identity of the contracting party is established.

Proving Mistake as to Identity

They intended to deal with a definite and identifiable person other than the person with whom he has apparently made a contract.

Proving Mistake as to Identity

They regarded the identity of the other contracting party, as a matter of crucial importance

Proving Mistake as to Identity

He took reasonable steps to verify the identity of the Contracting Party.

Contracts Inter Praesentes

Deals with interactions that are face to face between one party and the next.

Rebuttal of Presumption - Agency

Where the rogue dishonestly claims to be acting as an agent for someone else, a supposed principal, the presumption is effectively rebutted.

Common Mistake

Occurs where both parties have come to an apparent agreement; however, both enter on a fundamentally mistaken assumption about the subject matter which is not factually true.

Mistake as to the Existence of a Subject Matter

This arises where at the time the contract is being made, both parties assume the subject matter to be in existence, however it is not

Mistake as to Title

What is proposed to be sold or transferred to another, is already owned by him

Rescission

An equitable remedy which involves the setting aside of a contract.