LECTURE 8: Void/voidable Contracts, Illegality and Termination of Contract
CONTRACTS MUST BE ENTERED WITH FREE CONSENT OF THE PARTIES (Section 10). ‘Free consent’ can be impaired by coercion, fraud, undue influence, misrepresentation and mistake.
Without free consent, the contract can be voidable or void, depending on the circumstances. English| BM/Mandarin| Example| Effect on contract|
Coercion| | | |
Fraud| | | |
Undue influence| | | |
Misrepresentation| | | |
Mistake| | | |
3.Difference between fraud and misrepresentation:
Fraud (Section 17 of Contracts Act)| Misrepresentation (Section 18 of Contracts Act)| Fraud involves intention to deceive the other party to enter into the contract, resulting in injury to the other party, by the following methods: 1. Suggesting a false fact. 2. Concealing a fact. 3. Promising without intention to perform. 4. Doing a deceptive act. 5. Acting or omitting something which is considered fraudulent under the law. | Misrepresentation is a representation that is untrue. It is a false statement without intention to deceive that induces the other party to enter into the contract, by the following methods: 1. Stating as true something which is actually false, on a mistaken belief that it is a true. 2. Breach of duty that gives an advantage to the person committing it. 3. Causing a party to an agreement to make a mistake regarding the subject matter.| IF THE FRAUD OR MISREPRESENTATION DOES NOT INDUCE ANY OF THE PARTIES TO CONTRACT, THEN THE CONTRACT IS NOT VOIDABLE.|
State whether the following is fraud/mesrepresentation and the effect of such classification.
Situation| Fraud/Misrep?| Effect (void/voidable/valid)|
A, intending to deceive B, falsely represents that five hundred gantangs of indigo are made annually at A’s factory, and thereby induces B to buy the...