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INVALID CONTRACTS - Coggle Diagram

- - - - VOIDABLE
  - - - Party makes a statement BELIEVING IT TO BE TRUE
        
        Gahan V Boland (1984)
        
        Court Held: Def made innocent misrep because didn't know motorway would pass through property & Pl entitled to rescind the contract. NOT entitled to DAMAGES
    - - An UNTRUE statement made KNOWINGLY, or without belief in its truth, or made CARELESSLY without regard to whether true or false
        
        Fenton V Schoefield (1966)
        
        Court Held: GUILTY of Fraudulent Rep as vendor claimed high no of fish caught each year & he spent large sum of money on renovation. REMEDY: Can rescind or damages
    - - representation of fact, CARELESSLY made & relied on by another party to their advantage
        
        Must be in BREACH OF A DUTY of care which arose out of a SPECIAL FIDUCIARY RELATIONSHIP
        
        Duty of care; anyone with special skills or knowledge, who applies it to the assistance of another, owes a duty of care to them or others likely to be affected by it.
        
        Hedley Byrne V Heller and Partners Ltd (1964)
        
        Court Held: Def held a duty of care to give a good credit reference. Due to DISCLAIMER, not liable for negligent statement, even relied on skill & knowledge
- - - - Court Held: Set aside transaction where elderly lady transferred money into a joint account with her nephew days after husband's death. Presumption of undue influence arose from RELATIONSHIP BETWEEN THE PARTIES, AGE, HEALTH, POSITION IN LIFE & VULNERABILITIES of elderly lady.
- - - - Court Held: Contract where elderly lady was induced to make false settlement of her property in favour of a relative BY THREAT SHE WOULD BE DETAINED IN A MENTAL HOME was VOIDABLE on grounds of DURESS
- - - - COMMON LAW
        
        FUNDAMENTAL MISTAKE OF FACT destroys basis of agreement = OPERATIVE MISTAKE
        
        COMMON MISTAKE
        
        BOTH parties make the SAME mistake
        
        VOID
        
        MUTUAL MISTAKE
        
        Parties negotiate at CROSS-PURPOSES misunderstand each other, both making a DIFFERENT mistake. SUBJECTIVELY parties not reached AGREEMENT, both believe contract is for another purpose
        
        OBJECTIVE TEST APPLIED BY COURT
        
        Can be VOID/VOIDABLE
        
        Clayton Love V Steampacket (1970)
        
        Court Held: Reasonable person would have held cargo of scampi would have been refrigerated. BOUND BY TERMS EVEN THOUGH MISTAKE
        
        UNILATERAL MISTAKE
        
        Only 1 makes mistake & other KNOWS of mistake. 1 party is under an important mistaken impression & the other is NOT
        
        Bidding situations
        
        VOID
      - VOIDABLE IN EQUITY fairness
      - Restore to ORIGINAL position
        
        Where IMPOSSIBLE, law of EQUITY - solution (equitable rescission)
- - - - Grealish V Murphy (1946)
        
        Court Held: Independent advice was suspect, solicitor was aware of farmer's mental health issues who transferred his farm at undervalued price to 32 year old non-relative. INVALID CONTRACT