Vitiating Factors: Misrepresentation, Mistake, Duress, Undue Influence, Illegality
The vitiating factors
A contract may be rescinded or damages awarded where a vitiating factor undermines consent. Misrepresentation requires a false statement of fact (not opinion), addressed to the claimant, that induced the contract. Remedies depend on type: fraudulent (damages and rescission), negligent (damages and rescission), innocent (rescission, sometimes indemnity). Mistake may be common (both share the same error), mutual (each misunderstands the other), or unilateral (one party mistaken, other knows). Only fundamental mistakes affecting the existence of the subject matter or identity typically avoid a contract.
Duress, undue influence, illegality
Duress is illegitimate pressure (threats to person, goods, or economic interests) that coerces consent. Undue influence is improper pressure arising from a relationship of trust, presumed in certain relationships (solicitor/client, doctor/patient). Illegality covers contracts prohibited by statute or contrary to public policy (restraint of trade, crimes, corruption); effect ranges from void to unenforceable depending on the illegality and the parties' knowledge.
Traps to watch
- Opinion vs fact: a statement of opinion is generally not misrepresentation unless the speaker has superior knowledge.
- Inducement: the claimant must have relied on the statement; if they knew the truth or did their own investigation, the claim fails.
- Rescission bars: affirmation, lapse of time, third-party rights, and impossibility can bar rescission.
- Restraint of trade is void unless reasonable and protects a legitimate interest.
Rule of thumb
Ask: was consent genuinely given? If a false statement, mistake, pressure, or illegality tainted it, identify the type and the remedy. Worked example: a seller falsely states a car has never been in an accident; the buyer relies and buys. This is fraudulent misrepresentation, giving rescission and damages.