Deck 12: Genuine Consent

Question 1

Which of the following statements is the best description of 'common mistake'?

A) Both parties have made the same mistake about the existence or identity of the subject matter of the contract.
B) One of the parties is mistaken as to the nature of the document which they have signed.
C) Both parties are mistaken about a material fact that is important to the subject matter of the contract.
D) One of the parties is mistaken about a material fact regarding the subject matter of the contract, and the other party takes advantage of this mistake.

Answer 1

A

Question 2

Which of the following statements is the best description of an 'innocent' misrepresentation?

A) Silence or non-disclosure about a fact which creates a false impression.
B) A false statement of fact made knowingly, which the other person relies upon and suffers loss.
C) A false statement of fact made with the belief that it is true, which the other person relies upon and suffers loss.
D) A false statement of fact made carelessly, which the other person relies upon and suffers loss.

Answer 2

C

Question 3

In which of the following cases was the plaintiff able to establish mistake so that the contract was found to be void?

A) Leaf v International Galleries [1950] 2 KB 86.
B) McRae v Commonwealth Disposals Commission (1951) 84 CLR 377.
C) Lewis v Avery [1972] 1 QB 198.
D) Cundy v Lindsay [1878] 3 App Cas 459.

Answer 3

D

Question 4

Which of the following statements is the best description of 'mutual mistake'?

A) Both parties have made the same mistake about the existence or identity of the subject matter of the contract.
B) Both parties are mistaken about a material fact that is important to the subject matter of the contract.
C) One of the parties is mistaken about a material fact regarding the subject matter of the contract, and the other party takes advantage of this mistake.
D) One of the parties is mistaken as to the nature of the document which they have signed.

Question 5

When raising a plea of non est factum, the onus of proof lies on the person raising the plea.

Question 6

In the case of a contract for the sale of goods which is rendered void for mistake, a third party who has subsequently acquired those goods will not be entitled to retain them.

Question 7

Which of the following situations appears to involve a 'mutual mistake'?

A) X purchased goods on credit from Y, believing Y to be Z. Y was aware of X's mistake.
B) A beneficiary and an insurance company negotiated a life insurance policy, both unaware that the subject of the life insurance policy was in fact already dead.
C) Two parties agreed to send goods by a particular ship but there were two ships with that name and each party was thinking of a different ship.
D) X, who spoke little English, signed a document granting Y an option, believing it to be a receipt. This belief was encouraged by Y.

Question 8

Which of the following situations appears to involve a 'unilateral mistake'?

A) X, who spoke little English, signed a document granting Y an option, believing it to be a receipt. This belief was encouraged by Y.
B) Two parties agreed to send goods by a particular ship but there were two ships with that name and each party was thinking of a different ship.
C) X purchased goods on credit from Y, believing Y to be Z. Y was aware of X's mistake.
D) A beneficiary and an insurance company negotiated a life insurance policy, both unaware that the subject of the life insurance policy was in fact already dead.

Question 9

Which of the following situations appears to involve a 'common mistake'?

A) A beneficiary and an insurance company negotiated a life insurance policy, both unaware that the subject of the life insurance policy was in fact already dead.
B) X, who spoke little English, signed a document granting Y an option, believing it to be a receipt. This belief was encouraged by Y.
C) X purchased goods on credit from Y, believing Y to be Z. Y was aware of X's mistake.
D) Two parties agreed to send goods by a particular ship but there were two ships with that name and each party was thinking of a different ship.

Question 10

Which of the following statements are capable of being representations?

A) Statements of opinion.
B) Statements of fact.
C) Statements as to future conduct or intention.
D) Statements of law.

Question 11

Only mistakes of law can render a contract void.

Question 12

Which of the following statements is the best description of a 'fraudulent' misrepresentation?

A) Silence or non-disclosure about a fact which creates a false impression.
B) A false statement of fact made with the belief that it is true, which the other person relies upon and suffers loss.
C) A false statement of fact made knowingly, which the other person relies upon and suffers loss.
D) A false statement of fact made carelessly, which the other person relies upon and suffers loss.

Question 13

Why are courts generally reluctant to set aside a contract due to a mistake by one of the parties? Do you agree with this reluctance?

Question 14

Which of the following is the best description of 'unilateral mistake'?

A) Both parties are mistaken about a material fact that is important to the subject matter of the contract.
B) One of the parties is mistaken about a material fact regarding the subject matter of the contract, and the other party takes advantage of this mistake.
C) One of the parties is mistaken as to the nature of the document which they have signed.
D) Both parties have made the same mistake about the existence or identity of the subject matter of the contract.

Question 15

Where mutual mistake is pleaded, the courts apply an objective standard of the reasonable person.

Question 16

Which of the following statements is the best description of 'non est factum'?

A) One of the parties is mistaken about a material fact regarding the subject matter of the contract, and the other party takes advantage of this mistake.
B) Both parties are mistaken about a material fact that is important to the subject matter of the contract.
C) Both parties have made the same mistake about the existence or identity of the subject matter of the contract.
D) One of the parties to a contract is mistaken as to the nature of the document which they have signed.

Question 17

Where one of the parties is mistaken, and the other knows or ought to be aware of this, the contract may be void on the grounds of unilateral mistake.

Question 18

A common mistake involves genuine agreement between the parties.

Question 19

Which of the following situations appears to involve non est factum?

A) A beneficiary and an insurance company negotiated a life insurance policy, both unaware that the subject of the life insurance policy was in fact already dead.
B) X purchased goods on credit from Y, believing Y to be Z and unaware that Y had purchased Z's business. Y was aware of X's mistake.
C) Two parties agreed to send goods by a particular ship but there were two ships with that name and each party was thinking of a different ship.
D) X, who spoke little English, signed a document granting Y an option, believing it to be a receipt. This belief was encouraged by Y.

Question 20

Which of the following statements is the best description of a 'negligent' misrepresentation?

A) A false statement of fact made knowingly, which the other person relies upon and suffers loss.
B) A false statement of fact made carelessly, which the other person relies upon and suffers loss.
C) A false statement of fact made with the belief that it is true, which the other person relies upon and suffers loss.
D) Silence or non-disclosure about a fact which creates a false impression.

Question 21

Which of the following situations appears to involve 'unconscionability'?

A) A woman gave all of her property to the religious order of which she was a member.
B) A man induced another to sign a contract by telling him that if he did not, he would report his son to the police for committing a criminal offence.
C) A property developer promised their accountant a share in a business venture in return for a reduction in their bill.
D) An elderly Italian couple sign a mortgage in favour of a bank guaranteeing their son's debts; the bank manager knows the couple are unaware of the son's financial difficulties.

Question 22

Which of the following statements is the best description of 'undue influence'?

A) The improper use of a position of influence or power to induce a contract.
B) The improper use of a superior bargaining position to induce a contract.
C) The improper use of violence or of threats of violence to induce a contract.
D) The improper use of fraudulent information.

Question 23

Which of the following statements is the best description of 'duress'?

A) The improper use of fraudulent information.
B) The improper use of a position of influence or power to induce a contract.
C) The improper use of a superior bargaining position to induce a contract.
D) The improper use of violence or of threats of violence to induce a contract.

Question 24

Which of the following situations appears to involve 'duress'?

A) A property developer promised their accountant a share in a business venture in return for a reduction in their bill.
B) A woman gave all of her property to the religious order of which she was a member.
C) A man induced another to sign a contract by telling him that if he did not, he would report his son to the police for committing a criminal offence.
D) An elderly Italian couple sign a mortgage in favour of a Bank guaranteeing their son's debts; the Bank manager knows the couple are unaware of the son's financial difficulties.

Question 25

A contract induced by fraud is void.

Question 26

A misrepresentation is a false statement of fact or opinion.

Question 27

How and why has the common law of misrepresentation been largely superseded by consumer protection legislation such as the Competition & Consumer Act (2010) (Cth)?

Question 28

Explain the difference between innocent and fraudulent misrepresentation.

Question 29

Under the Australian Consumer Law, unconscionability is the same as misleading and deceptive conduct.

Question 30

Which of the following statements is the best description of 'unconscionability'?

A) The improper use of fraudulent information.
B) The improper use of violence or of threats of violence to induce a contract.
C) The improper use of a position of influence or power to induce a contract.
D) The improper use of a superior bargaining position to induce a contract.

Question 31

In order to succeed in an action in negligent misrepresentation, what must the plaintiff establish in a court?

Question 32

To establish duress, the onus is on the coerced party to show it was the only reason they entered into the contract.

Question 33

Explain the difference between duress and undue influence.

Question 34

The right of an innocent party to rescind may be lost if the parties cannot be substantially restored to their original positions.

Question 35

Which of the following situations appears to involve 'Undue Influence'?

A) A woman gave all of her property to the religious order of which she was a member.
B) The directors of a company issued a prospectus which contained information that was incorrect.
C) A man induced another to sign a contract by telling him that if he did not, he would report his son to the police for committing a criminal offence.
D) An elderly Italian couple sign a mortgage in favour of a Bank guaranteeing their son's debts; the Bank manager knows the couple are unaware of the son's financial difficulties.

Question 36

In Phillips v Brooks [1919] 2 KB 243 which of the various parties was successful in establishing that the contract was not void for mistake?

A) The pawnbroker.
B) The jeweller.
C) The plaintiff.
D) Sir George Bullough.

Question 37

If there is no special relationship, a claim of undue influence will fail.

Question 38

Which of the following relationships will NOT give rise to a presumption of undue influence?

A) Religious advisor and devotee.
B) Doctor and patient.
C) Parent and child.
D) Husband and wife.

Question 39

Which of the following is NOT one of the activities prohibited under the Australian Consumer Law?

A) Representations as to the future.
Or misleading representations about past conduct.
C) Misleading conduct relating to employment.
D) False or misleading representations in relation to land.

Question 40

Why was the plaintiff in Allcard v Skinner (1887) 36 Ch D 145 unsuccessful?

A) She could not establish duress.
B) She could not prove unconscionability.
C) She could not show that she was under undue influence when she gave away her money.
D) She had lost the right to void the contract.

Question 41

In Commercial Bank of Australia v Amadio (1983) 151 CLR 447 which of the following was NOT a reason why the bank was considered to have acted unconscionably?

A) The bank took advantage of the Amadios' special disabilities.
B) It did not insist that the parents obtain separate independent advice.
C) The bank exercised economic duress.
D) The bank did not explain the real financial position of the son whom his parents were trying to help.

Question 42

The test for unconscionability is the special disability of the weaker party.

Question 43

Which of the following situations will NOT give rise to a successful claim of unconscionability?

A) The language of the transaction was complex.
B) The plaintiff sought independent expert advice.
C) The plaintiff was elderly.
D) The plaintiff was illiterate.