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

Use this fact situation to answer the questions that follow. A has two Corvette Stingray automobiles,one built in 1965 and the other built in 2009.Generally speaking,both cars are worth approximately the same amount (about $70 000.00).A now wants to sell the 1965 Corvette and to this end begins negotiations with B,who knows that A owns both a 1965 and a 2009 Corvette.In discussions with B,A says "I'm thinking of selling my Corvette for $65 000.00." B believes A is talking about his 2009 Corvette,so B says "I'll buy it at that price," and pays A the $65 000.00.Later A calls B asking him when he is going to pick up the 1965 Corvette.Having thought that he was buying the 2009 Corvette,B now tells A he wants his money back. In this situation,

A party who seeks rectification of a document must satisfy the conditions for rectification.Explain.

Albert has agreed to sell his car to Larry for $14 000.00.Albert told Larry that the car had never been in an accident,was in good condition,and drove like a dream.Albert knew that this was untrue,but wanted to get as much money as he could for the car.In fact,the car had been in two accidents,had substantial frame damage,and could not be driven safely on the road.Assume that Harry had no way of checking on the condition of the car and that the principle of caveat emptor does not apply.In this situation,Albert's statement about the car is

A statement of opinion such as "it is the best car in the lot" can amount to a misrepresentation.

Mistake about terms includes the inadvertent use of wrong words.

In a legal sense,mistake is

Explain why an insurance contract needs the utmost good faith.

When it comes to deciding whether or not a contract is void,the common law knows no half measures.Explain.