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Cover Introduction to Business Law

7. Vitiating Factors  

A contract may meet the necessary formation requirements of offer and acceptance, consideration, and intention to create legal relations, but still not be binding because it lacks other necessary factors. These invalidating factors are sometimes referred to as ‘vitiating factors’. This chapter discusses statements that constitute actionable misrepresentations; the difference between fraudulent, negligent, and innocent misrepresentation; the remedies available for each type of misrepresentation; and the effect a misrepresentation will have on the validity of a contract. The chapter considers types of mistake and when a court will regard a mistake as an operative mistake rendering the contract void. It also considers how duress and undue influence may arise, the presumptions relating to undue influence, and whether the presence of duress and undue influence will make a contract voidable. Finally, the chapter considers types of contract that are illegal under statute and under common law.


Cover Card & James' Business Law

10. Vitiating factors  

This chapter focuses on the vitiating factors in a contract, namely those that can render a contract void ab initio or voidable (the distinction between void and voidable contracts is discussed). These include misrepresentation, mistake, duress, undue influence, unconscionable bargains, and illegality and public policy. Certain vitiating factors like mistake will render a contract void ab initio whilst others such as misrepresentation will render the contract merely voidable. It also shows that contracts are not beyond challenge once formed and describes several cases where the courts have held that a contract should not be enforceable despite the validity of the contract’s formation.