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BLW 1105_TOPIC FIVE (1)

Vitiating elements are factors that affect the enforceability of contracts, potentially rendering them void or voidable. Key factors include misrepresentation, mistake, duress, and undue influence, each with specific definitions and legal implications. Misrepresentation can be innocent, fraudulent, or negligent, while mistakes can be of law or fact, and duress and undue influence involve coercion or manipulation in contractual relationships.

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17 views4 pages

BLW 1105_TOPIC FIVE (1)

Vitiating elements are factors that affect the enforceability of contracts, potentially rendering them void or voidable. Key factors include misrepresentation, mistake, duress, and undue influence, each with specific definitions and legal implications. Misrepresentation can be innocent, fraudulent, or negligent, while mistakes can be of law or fact, and duress and undue influence involve coercion or manipulation in contractual relationships.

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braizieshan78
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TOPIC FIVE: VITIATING ELEMENTS (FACTORS AFFECTING

CONTRACTS)

These are circumstances which interfere with the enforceability of a contract.


They have a negative effect on contracts. They may render a contract void or
voidable. A void contract is unenforceable while a voidable contract is enforceable
unless avoided.

These factors include: -


1. Misrepresentation
2. Mistake
3. Duress
4. Undue influence

1. MISREPRESENTATION
This is a false representation. It is a false statement made by a party to induce another
to enter into a contractual relationship. It renders the contract avoidable at the option
of the innocent party.

Examples of misrepresentation include:


a) Innocent Misrepresentation
b) Fraudulent Misrepresentation
c) Negligent Misrepresentation

A) Innocent Misrepresentation
A statement is deemed to be innocently misrepresented if the maker honestly
believed in its truth though it was false and had no means of ascertaining that it was
false as was the case in Oscar Chess v. Williams where the defendant had no means of
ascertaining that the year of registration of the vehicle was incorrect.
If innocent misrepresentation is proved, the innocent party may either: -
i) Apply for rescission of the contract.
ii) Sue for indemnity for any direct financial loss occasioned by the representation.

B) Fraudulent Misrepresentation
A statement is deemed to be fraudulently misrepresented if the maker: -
 Has knowledge that it is false.
 Makes it carelessly and recklessly.
 Does not believe in its truth.

Remedies for fraudulent misrepresentation are either: -


i. Action for rescission of contract.
ii. Damages for the tort of deceit.

C) Negligent Misrepresentation
A statement is deemed to be negligently misrepresented if the maker has both means
of capacity of ascertaining its falsity but fails to do so.

However, for negligent misrepresentation to be relied upon, it must be proved that: -


a) There was a special relationship between the maker and recipient of the
statements hence the maker owed the recipient a legal duty of care.
b) That the party suffered loss of a financial nature.

2. MISTAKE
There are two types of mistakes: mistake of law and mistake of fact. As a general rule
a mistake of law does not affect a contract however, a mistake of foreign law may
affect a contract. Mistakes of facts affected contractual relationships. A mistake is
said to be misapprehension of a fact or factual situation. It is an erroneous
assumption.

Mistake of fact that affect contracts are generally referred to as operative mistakes and
the law recognizes various types of operative mistakes:
i. Common: mistake as to the existence or ownership of the subject matter
ii. Mutual: This is a mistake to the subject matter of contract. It arises when parties
misunderstand each other or at cross purposes. No agreement arises between
them for lack of consensus ad idem.
iii. Unilateral: a mistake as to the identity of one of the parties to the contract. Only
one party is mistaken and the mistake is induced by the other party.
iv. Mistakenly signed documents: This is a mistake as to the nature of the contract;
it arises when a party to a contract signs the wrong document. Such a mistake
does not render the contract void but avoidable at the option of the party.
v. Mistake as to quality of subject matter: arises when one of the parties to the
contract is mistaken about the quality of the subject matter of the contract. Such a
mistake renders the contract voidable.

3. DURESS
At common law duress means actual violence or threats thereof. It exists where a
contractual relationship is procured by actual violence on the person or threats
thereof. The party is compelled or coerced to contract. For the most part, duress
consists of threats. Duress was developed by the common law with a very narrow
scope. It renders a contract voidable at the option of the innocent party.

For the contract to be avoided, the innocent party must prove that: -
a) The threat was intended to cause fear, injury or loss of life.
b) The threat was directed to his person or body as opposed to his property. In
Friedberg Seelay v. Klass the defendants gained access to the plaintiff’s house and
threatened not to leave unless she sold her jewels to them.

4. UNDUE INFLUENCE
It is said to exist where a party dominates the others will thereby inhibiting its
exercise of an independent judgement on the contract. One party thus exercises
overwhelming influence over the other. Undue influence was developed by equity
with a fairly wide scope.

It renders a contract voidable at the option of the innocent party. Undue influence
renders a contract voidable in the following circumstances;
a) Where parties have a special relationship e.g. parent-child, advocate-client;
undue influence is presumed in favour of the weaker party.
b) When parties have no special relationship. The party pleading undue influence
must prove it by evidence. The circumstances must be such that the party did not
make an independent judgement on the transaction
c) Unconscionable bargains. They are transactions entered into in circumstances in
which one party takes advantage of its position to procure the deal. Such transactions
are voidable at the option of the innocent party.

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