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

James has an old car for sale.Betty views the car and in response to a question about the age of the car,James replies,"I think it is a 1929 Ford." Betty purchases the car,but the written contract makes no mention of the year of the car.Actually,the car is a 1932 Ford.What remedy does Betty have? What defenses are available to James?

Sam buys a car from Denise for $3,500 "as is".They agree to the terms of the contract orally.In attempting to reduce the contract to writing,Sam mistakenly writes down the amount as "$2,500".Both parties sign the contract.If either party resists any attempt to correct the document by denying a common mistake the court may

Explain why an insurance contract needs the utmost good faith.

Mr.Chessman,an elderly man,is asking a prominent businessman,Mr.Ross,to sign a contract for the restoration of a downtown apartment building that Mr.Ross owns and that Mr.Chessman lives in.During the ensuing discussion,Mr.Chessman states,"And if you don't sign,your children may suffer." Mr.Ross reluctantly signs.Will this contract be enforceable against Mr.Ross? Explain.

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.

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

Guido is an unsavory money lender who charges 35 percent interest.Upon learning that Sylvia,one of his clients,had become unable to make her weekly payment,Guido tells her that he has "a way of dealing with defaulters where they think twice next time." She then promptly signs a contract agreeing to a 50 percent rate over a longer period of time.Sylvia now wants to get out of this second contract.As a lawyer,what should you advise Sylvia to do?

Explain the concept of non est factum and how this concept has evolved over the years.

A has a Tom Thomson painting that he wishes to sell.A has heard that B is an art lover and takes very good care of the paintings of Canadian masters.As a result,A decides that he will only contract with B.So he calls B and they make a deal over the telephone.Unfortunately,B's servant C overhears the conversation and before B can get to A's house,C arrives there pretending to be B.A sells the painting to C believing that C is B.Just after C leaves A's house,B shows up and A realizes his error.This situation is a classic example of

Non est factum is based not only on the principle of placing loss on the person guilty of carelessness,but also upon recognition of the need for certainty and security in commerce.For these reasons,the application of the principle

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

Misrepresentation never gives rise to damages for torts as well as rescission in contract.

The parking enforcement officer gave Jim a parking ticket.But as it turns out,the NO PARKING sign had been placed in error on private property.Can Jim recover damages in a tort action?

In a legal sense,mistake is

If the parties disagree over what the words in a contract mean,the court will declare the contract void.

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

A legal mistake is an error in judgment.

The cooling-off period is a time during which a consumer may cancel or rescind a contract without any reason whatsoever.

The threat by one party that unless the other party enters into the contract,he will harm the other's child constitutes undue influence.

What is an entirety clause?