Vitiating Factors
Vitiating factors have an impact on the effect of the contract and may render it void, voidable, valid but unenforceable
Factors are
1) Mistake
2) Misrepresentation
3) Duress and undue influence
4) Illegality and contrary to public polic
Mistake
General rule about the quality or the characteristics of the goods do not invalidate the contract
Some misconceptions, which
will render the contract, void:
Mistake as to the document that is being signed
Mistake as to the identity of the other party
Mistake as to the identity of the subject matter. For example, X was selling item B, but Y was intending to buy item A, known as mutual or non-identical mistake
Mistake as to the possibility of performing the contract which unknown to both parties cannot be performed
Mistake as to the existence of the subject matter which unknown to both the parties does not exist
Misrepresentation
A misrepresentation is an untrue statement of fact, which is one of the causes, which induces a contract
This means the contract is valid until the victim of the misrepresentation exercises his option to avoid the contract
Fraudulent misrepresentation involves one party knowingly making a statement that is false or made recklessly, not caring whether it is false or not.
Innocent misrepresentation is a statement, which the maker honestly and reasonably believes to be true.
Negligent misrepresentation is when a party makes a statement without any reasonable grounds for believing it to be true
Duress & Undue Influence
Duress is a common law concept that occurs when physical violence or the threat of violence causes someone to make a contract. The effect is that the contract is voidable.
Undue Influence was developed by equity, where one party brings pressure on another in order for them to complete a contract. It is likely that the relationship may be based on trust, for example a solicitor, client, parent, and child.
Illegality & Contrary to Public Policy
Illegality
The courts will not enforce contracts, which are prohibited by statute, or contracts to commit crimes or civil wrongs.
Contracts Contrary
to public Policy
These contracts are not prohibited by statute nor are they illegal, but they cannot be enforced because they are contrary to public policy