Chapter 13 - Contract Performance, Breach, and Remedies

Define mistake and the difference between mutual vs unilateral.

An error or unconscious ignorance of material fact.

In general a mutual mistake makes the contract voidable by either party.

In general, a unilateral mistake will NOT be rescinded by the courts

What are the 2 exceptions for a unilateral mistake?

1. the other party knew of and failed to correct the mistake

2. the mistake was made because of an inadvertent math error without gross negligence. 

Explain the Raffles v. Wichelhause landmark case and how it related to mistakes. 

Cotton farmer in India contracts with England Merchant. Two ships with the same name leaving different months, leads to error in delivery of cotton. Bilateral mistake leads to void contract.

What happens if there is a mistake of value rather than a mistake of fact?

Never leads to the contract being rescinded. 

What are the 4 elements of Fraud?

1. misrepresentation of material fact

2. made with the intent to deceive

3. innocent party justifiable relies on the misrepresentation

4. *if seeking damages harm must be proven. 

How can a misrepresentation of material fact be based on actions?

concealment of important information.

What is needed for Intent to Deceive?

“Scienter” - say something you know is incorrect, or have a reckless disregard for the truth. 

Explain Undue Influence.

when a dominant party takes unfair advantage based on a confidential relationship. The court presumes undue influence and the defendant has to prove themselves. 

Explain Duress.

if a party is forced into entering into a contract by threatening actions the contract is voidable.