Exam 9: Grounds Upon Which a Contract May Be Impeached: Misrepresentation, Undue Influence, and Duress

Define undue influence and distinguish undue influence from duress.

Ryan Thompson is a lawyer and was approached by a client who wished to sell him shares in a business he owned. Ryan accepted the offer by purchasing the shares. The business is a tremendous success. Later the client claims that he sold the shares to Ryan because of Ryan's undue influence over him. What must the client prove in order to be successful in his action?

When an event could reasonably be expected to influence the decision of a party to enter a contract, that event may be said to be "material".

If a party to an existing contract discovers they had made an incorrect statement during the contract negotiations, then they should

Paul, a poor farmer, has just learned he has a serious medical problem. The medication needed is extremely expensive and not covered by medical insurance. Hearing of his plight, the next- door neighbour agrees to buy a prize steer, but at half its value. Legally speaking, what has this neighbour done?

What effect does undue influence or duress have upon a contract and what steps must a person subject to the undue influence or duress take in order to exercise her remedy?

The meter maid gave Jim a parking ticket. But as it turns out, the NO PARKING sign had been placed in error on private property. Can Jim recover damages in a tort action?

For all but one of the following reasons the law distinguishes a separate category of contracts requiring "utmost good faith". Which is the EXCEPTION?

Dot sold her land to Seth. Three weeks before making the contract, she told Seth the well on the property had a flow of 10 gallons per minute. Dot had obtained the information from a certified water surveyor. Two months after taking title to the property, Seth discovered that the flow in the well was only 1 gallon per minute. What remedy might Seth be entitled to from Dot?

Both rescission and damages are available remedies for misrepresentation only when the misrepresentation is

Undue influence:

Misrepresentation can affect the contract only if the misrepresentation is

Guido is an unsavory money lender who charges 35% interest. Upon learning that Sylvia, one of his clients, had become unable to make her weekly payment, Guido tells her that he has "a way of dealing with defaulters where they think twice next time." She then promptly signs a contract agreeing to a 50% rate over a longer period of time. Sylvia now wants to get out of this second contract. As a lawyer, what should you advise Sylvia to do?

The legal concept where actual or threatened violence is used to persuade a party into entering a contract is called

Jack really needs money to pay off his mortgage before the bank forecloses. He goes to "Shark" who agrees to lend Jack the money if Jack will pay 100% interest. This is an example of undue influence.

An innocent party can lose her right to repudiate a contract made with undue influence by

Name the three types of misrepresentation and describe the one that is dealt with only by the Law of Contract.

A conditional promise to pay only if the debtor defaults is a guarantee.