Invalidating Contracts (Vitiating Factors) Pt 1 - Coggle Diagram
Invalidating Contracts (Vitiating Factors) Pt 1
An innocent party may escape their obligations if the agreement formation involved behaviours contrary to good conscience.
One party uses or threatens to use, illegitimate pressure to obtain the other party's consent
Contracts can be set aside where the duress caused the innocent party to enter into the contract
The victim of duress must act reasonably soon to have the contract set aside
Once the influence has subsided, they will be treated as having affirmed the contract
Because of their relationship, one party necessarily places confidence and trust in the other.
Undue influence may permit the weaker party to avoid the contract
Victim must act reasonably soon to have the contract set aside.
Type of undue influence
Actual undue influence
Weaker party must prove that the transaction was the outcome of actual influence
Presumed undue influence
Onus of proof shifts to the stronger party to prove the weaker party was freed of the deemed undue inflence
General Controlling Influence is proven
Procedural unconscionability or unfairness
The weaker party suffers from a special disadvantage in that they are unable to properly judge what is in their own best interest
The stronger party is aware or ought to have been aware of the special disadvantage
The stronger party takes unfair advantage of the circumstances