Please enable JavaScript.

Coggle requires JavaScript to display documents.

Unit 8: Void Contracts - Coggle Diagram

- - - - Common
        
        where both parties make the same mistake
      - Mutual
        
        Where the parties are at cross-purposes, but each believes that the other is in agreement
      - Unilateral
        
        Where one party is mistaken and the other knows and takes advantage of the mistake
    - - a statement of material fact, made prior to the contract by one party to the contract to the other, that is false or misleading and that induced the other party to enter into the contract.
      - Innocent
        
        A car dealer assures a buyer that a used car has never been in an accident, relying on a clean history report and information from the previous owner. Later, the buyer discovers the car had a minor unreported accident. The dealer genuinely believed the information was accurate.
      - Negligent
        
        A financial advisor recommends an investment on crypto-assets, claiming it is low-risk but fails to adequately research and misses significant risks. The client suffers losses due to the advisor's carelessness, not intentional deceit.
      - Fraudulent
        
        A real estate developer falsely claims that apartment units have high-quality insulation and soundproofing, knowing cheaper materials were used. Buyers rely on these lies and later discover the substandard quality.
    - - concerns itself with the character of the contract, unllike misreprensentation or mistake, which are more concerned wether it was entered into voluntarily
    - - Duress
        
        It is an essential characteristic oc contract law that the parties enter into an agreement voluntarily. As such, a party who has been coerced into entering into a contract may be able to avoid the obligations of the contract by reliance upon duress, although much depends on the sort of pressure that has been applied to the claiment
        
        Threats to property
        
        This occurs when one party is forced into a contract (or to perform a contract) due to unlawful threats against their property or goods, rather than their person.
        
        Economic duress
        
        when one party uses illegitimate economic pressure to force another party into a contract or a contract variation. It’s not about physical threats — it’s about financial pressure that leaves the victim with no real choice but to agree.
  - - - avoided by one party; that is, not automatically void, but one of the parties may choose to treat it as void and thus unenforceable, or continue with it if they so desire, or amend its terms to those that are more preferable
    - - Treated as though it had never been valid at all
- - - - Mistake of law or of fact
        
        is a ground of nullity of the contract where is bears on essential qualities of the act of performance owed or of the other contracting party
      - Mistake about essential qualities
        
        is a ground of nullity only as regards contracts entered into on the basis of considerations personal to the party
      - Mistake about mere motive
        
        is not a ground of nullity unless the parties have expressly made it decisive element of their consent.
        
        Mistake about the motive for an act of generosity is a ground of nullity where the donor would not have made it
      - Mistake as to value
        
        is not a ground of nullity where, in the absence of a mistake about the essential qualities of the act of performance, a contracting party makes only in inaccurate valuation of it.
    - - the act of a contracting party obtaining the consent of the other through maneuvres or lies.
      - Intentional concealment
        
        concealment of informations that they (the contracting party) know has a decisive character for the other pârty
    - - when one party contracts under the influence of a constraint that instills fear of exposing oneself, one's wealth, or that of one's close ones to significant harm.
      - is a ground for nullity whether it has been exerted by one party or by a third party
      - when one party, taking advantage of the state of dependence in which its contracting party finds itself, obtains from them a commitment that they would not have undertaken in the absence of such constraint and derives a manifestly excessive advantage.
  - - - Nullity is relative when the violated law aims at protecting a private interest. It applies:
        
        If the consent of the parties is invalid because of defects in consent (mistake, fraud, or violence)
        
        In case of incapacity of the parties to conclude the contract
      - Can be requested only by the protected party
      - Time limit: 5 years from the contract conclusion or discovery of consent defect
    - - Applies when a rule protecting public interest is violated
      - Can be claimed by anyone with legal interest (even the public prosecutor)
      - Examples
        
        Illicit or immoral content
        
        Missing formal condition in solemn contract
      - Purpose
        
        Sanctions violations of public order (e.g. selling drugs or body parts)
      - General rule
        
        Retroactive annulment (the contract is treated as if it never existed from the start) (but partial annulment is possible in some cases)
      - Presciption period
        
        5 years