9 Genuine consent
Learning objectives
On completion of this Chapter, you should be able to:
- explain the effect of a mistake on a contract
- explain the different types of mistakes
- explain the effect of a mistake on a written document and the effect of the operation of the legal doctrine of non est factum
- distinguish between innocent and fraudulent misrepresentation and describe their effects on a contract
- explain what is required to amount to a negligent misrepresentation
- explain the meaning of the terms ‘duress’ and ‘undue influence’, and describe their effects on a contract
- explain what unconscionable conduct is and its effect on a contract.
Key terms
You will notice these key terms, which are mentioned throughout the chapter, to help you to better understand and remember the material:
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- Collateral contract: a separate or subsidiary contract to the main contract, which may be verbal or written, and which exists independently of the main contract (that is, it is not a term of the main contract
- Common mistake: both parties are mistaken as to existence or identity of the subject matter
- Duress: threats of, or use of, force that deprives the innocent party of exercising their free will
- Misrepresentation: a false statement of fact, which may be intentionally or unintentionally made
- Mutual mistake: where both parties to a contract are mistaken, but about different things
- Non est factum: ‘not my doing’ or ‘not my deed’; where a party under a disability is mistaken about the very nature of a document that they are signing, believing it to be one thing when in fact it is something quite different
- Rescission: the reversal of a transaction which restores both parties back to their original positions
- Representation: a statement of fact
- Restitution: an equitable remedy available for the unjust enrichment of the defendant at the plaintiff’s expense
- Unconscionable contract: an unfair or unjust contract
- Undue influence: the improper use of power
- Unilateral mistake: where one party is mistaken about some aspect of the contract, but the other party is not.
Introduction
In the last chapter we looked at the capacity of you and the other party to see whether you understood both the rules and obligations associated with entering into a contract. In this chapter we are going to look at exactly what it is that you would have consented to when entering into a contract.
- made a mistake
- made a misrepresentation
- used duress (force)
- undue influence, or
- displayed unconscionable conduct,
Step 5: Is there genuine consent?
If you are satisfied that there is no problem with the ability of you and the other party to fully understand what you are entering into (as in, the question of capacity), then you can move on and consider whether there is genuine consent between you and the other party.
what have the parties consented to?
If the contract has been entered into because of a mistake by you or the other party, or because one of you ma