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Transcript of Voluntary Consent
There are 4 different situations that could invalidate voluntary consent.
Voluntary Consent is an important component of the enforceability of a contract. Even if all components of a valid contract are present, the genuine agreement to the terms by both parties is still a necessity.
#2. Fraudulent Misrepresentation
#3. Undue Influence
Mistake of value = Not knowing the true value of a good or service
Mistake of fact:
Case 1: Unilateral Mistake
Elena intends to sell her motor home for $17,500 but when she emails Chin about it she accidentally types $15,700. Chin accepts. Elena made a unilateral mistake and now is bound to sell it for the lower price
*The contract may not be enforceable only if the other party was aware of the mistake of fact or it was due to a substantial mathematical error.
Case 1: Bilateral Mistake
In Raffles vs Wichelhaus, there was an agreement by both parties to ship goods on a boat called Peerless. Unfortunately they were referring to two different vessels. There was mutual misunderstanding and therefore a bilateral mistake.
*The contract can be rescinded by either party
There are 3 components
Misrepresentation of material fact must occur
Intent to Deceive
Scienter or "guilty knowledge" generally implies intent to deceive. It exists if a party knows that a fact is not as stated.
Justifiable Reliance on the Misrepresentation
The misled party must have a legitimate reason for relying on the misrepresentation, and the misrepresentation must be a significant factor in persuading the party to agree to the contract.
The customer tells the owner of an art gallery that he only wants to see paintings done by Jasper Johns, and the owner immediately shows him to paintings done by someone else
A man selling his land states "This land will be worth twice as much next year."
Tanya is selling property to Lev and tells him "You can build a condo a hundred stories high if you want to" even though she knows of an ordinance preventing buildings taller than three stories
A man is selling his car that has been in an accident and has been repaired and he does not volunteer this information to the potential buyer.
Results from relationships where one party is in a position to greatly influence the other party and overcome that party's free will. Some examples of potential relationships are parent-child, attorney-client, trustee-beneficiary, etc.
It is important to note, there must be clear and convincing evidence that the person did not act out of their own free will
A threat, blackmail, or extortion used to force one party into a contract constitutes duress.
Proof of threat
Removal of free will
If all of the components of any of the four above situations are met, then a contract can be voided on the grounds that voluntary consent was not present.
Was there voluntary consent?
Jerome is an elderly man who lives with his nephew, Philip. Jerome is totally dependent on Philip's support. Philip tells Jerome that unless Jerome transfers a tract of land he owns to Philip for a price 30% below market value, Philip will no longer support and take care of him. Jerome enters into the contract. Can Jerome void the contract due to a lack of voluntary consent?