Exam 9: Grounds Upon Which a Contract May Be Set Aside: Mistake and Misrepresentation

Damages are not generally awarded in cases of innocent misrepresentation;however,"out-of-pocket" expenses might be awarded.These are referred to as

James says to Jack,"I am selling my Toyoda for $500.Would you like to buy it?" Jack,believing that James was referred to his automobile,replies,"Yes,I'll buy your Toyota for $500." Jack pays $500 and James presents him with a Japanese doll called Toyoda.Jack asks for his money back because he misunderstood James.Should this matter go to court,the court will most likely find that

James purchases an antique chair at a garage sale for $150.00.Later he sells it to Jacqueline for $300 and makes a nice profit.A few months later the Antiques Road Show comes to town and Jacqueline takes the chair to the show to be valued.She is advised that the chair dates as far back as 1866 and is worth approximately $5000.Which of the following is true?

Use the fact situation in Q4 to answer the related question that follows. Based on the fact situation above,to ensure that A's argument succeeds and he gets the house from B,A will ask the court for

What is a material event?

The most fundamental mistake that radically changes the nature of the bargain of the parties is a mistake about the existence of the subject matter of the contract.

Ryan Thompson,a lawyer,was approached by a client who wished to sell him shares in a business he owned.Ryan accepted the offer by purchasing the shares.The business is a tremendous success.Later the client claims that he sold the shares to Ryan because of Ryan's undue influence over him.What must the client prove in order to be successful in his action?

If an incident of misrepresentation is neither fraudulent nor negligent,yet it resulted in harm,then

What is meant when we say that an innocent party may be entitled to indemnity or compensation as a result of an innocent misrepresentation?

Christi was told by the store's produce manager that the oranges were of a variety that had a extremely high level of vitamin C.So she bought a case for her health club's garden party.At the party,the guests enjoyed eating up all the oranges.When Christi was next in the store,the manager corrected his prior statement,saying the oranges were of a different variety than what he had thought.Does Christi have a legal claim for rescission?

What is rescission? Explain how rescission relates to mistake in contract law.

Benny,who owns a classic car,lives in an apartment with a disabled roommate.Benny is approached by Dick Albert,who advises Benny that if he does not sell his classic car for $2000 (a fraction of its value),the roommate "will have both his arms broken." Benny then signs the contract and Dick pays him the $2000.Benny was never threatened at any time during the transaction.What remedies can Benny pursue and what must he do in order to pursue those remedies? What is the likelihood of success?

It is a criminal offence for a lender to charge an interest rate in excess of 50 percent.

Some consumer protection legislation provides for a cooling-off period.What is a cooling-off period and how does it benefit consumers?

A spouse may set aside a transaction if he or she can prove actual undue influence.

If,at the time a contract was made,the subject matter did not exist,without the knowledge of the seller,the contract is

You are going to lend money to a corporation owned by Mr.X.You are requiring that Mr.X and his wife,Ms.Y,sign personal guarantees agreeing to be responsible in case of default.Why might you be concerned about your ability to enforce the guarantee against Ms.Y,and how should you protect your position?

Jack really needs money to pay off his mortgage before the bank forecloses.He goes to "Shark" who agrees to lend Jack the money if Jack will pay 100 percent interest.This is an example of undue influence.

Rectification will be ordered where

In contract law,the domination of one party over the mind of another to such a degree as to deprive the latter of the will to make an independent decision is known as undue domination.