Chapter 15

What is voluntary consent in contract law?

Refers to a knowing and voluntary agreement to the terms of a contract. If voluntary consent is lacking, the contract will be voidable. Lack of consent can occur due to mistakes, misrepresentation, undue influence, or duress.

What types of mistakes can make a contract voidable?

A contract can be voidable if there is a mistake of fact. There are two types of mistakes:

1. Bilateral (Mutual) Mistake: Both parties make the same mistake.

2. Unilateral Mistake: Only one party makes the mistake.

Mistakes of value or quality do not make a contract voidable.

What are the exceptions to a unilateral mistake?

can still be voidable under these exceptions:

1. If the other party knew or should have known about the mistake.

2. If the mistake was due to a substantial mathematical error (like in addition or subtraction) made unintentionally and without gross negligence.

What is the distinction between mistake of fact and mistake of value?

• Mistake of Fact: Occurs when there is a misunderstanding about a material fact that is important to the contract. It can make a contract voidable.

• Mistake of Value: Refers to a misunderstanding about the value or quality of the object in the contract. This does not affect the enforceability of the contract, as value is subjective.

What is fraudulent misrepresentation in contract law?

occurs when one party is fraudulently induced to enter into a contract. The contract can be rescinded (cancelled) or enforced for damages if the innocent party was harmed. The elements of fraudulent misrepresentation are:

1. A misrepresentation of a material fact.

2. Intent to deceive.

3. The innocent party's justifiable reliance on the misrepresentation.

4. Harm to the innocent party as a result of the misrepresentation.

How does duress affect the enforceability of a contract?

refers to unlawful pressure or threats that force a party to enter into a contract against their will. Contracts formed under duress are:

1. Voidable: The party subjected to duress can rescind the contract.

2. A defense to enforcement: The affected party may use duress as a reason not to honor the contract.

What is undue influence in contract law?

occurs when one party unfairly influences another party's decision to enter into a contract, typically due to a relationship of trust or authority. Contracts formed under undue influence are voidable by the party who was influenced.

What is an adhesion contract?

a standard-form contract created by a party with stronger bargaining power, typically offered on a "take-it-or-leave-it" basis. The weaker party has no opportunity to negotiate the terms, leading to potential questions about voluntary consent and fairness.

What are the issues with unconscionability in contracts?

A contract may be deemed unconscionable if it is overly one-sided or unfair. In such cases, the court may refuse to enforce the contract. Unconscionability raises questions about whether the weaker party truly voluntarily consented to the contract.

How does fraud affect a contract's enforceability?

Fraud affects the authenticity of a party's consent to a contract. When one party is fraudulently induced to enter into a contract, the contract can be avoided. The innocent party has the option to:

1. Rescind the contract and restore their original position.

2. Enforce the contract and seek damages for harm caused by the fraud.

How do misrepresentation and fraud differ?

• Misrepresentation is when one party makes a false statement of fact, but it may not necessarily be made with intent to deceive.

• Fraud involves deliberate deception with the intent to deceive the other party, leading to harm.

What types of contracts are affected by voluntary consent issues?

Contracts may be affected by voluntary consent issues if there is:

1. Mistakes of fact: A misunderstanding about material facts.

2. Misrepresentation or fraud: False statements or deceit leading to unfair consent.

3. Duress: Unlawful pressure or threats influencing the decision to contract.

4. Undue influence: Unfair persuasion, typically in a relationship of trust.

What is the standard for voluntary consent?

For consent to be voluntary, it must be:

1. Knowing: The parties understand the terms and consequences.

2. Free of undue influence: No force or deception involved.

3. Uncoerced: No pressure or threats causing a party to agree.