VITIATING OF CONTRACTS
GROUP TWENTY FOUR(24)
Management And Procurement And Supply Chain Management
GROUP MEMBER’S LIST
 SB/ADM/21/0032 – SANDRA AKLIE
 SB/PCM/21/0006 – DANKWA NANA KWASI
 SB/ADM/21/0133 – SACKEY AKUA PRISCILLA
 SB/PCM/21/0033 – KYEI SERWAA COMFORT
 SB/ADM/21/0134 – ASANTE EMMANUEL
 SB/PCM/21/0083 – DANQUAH KESSEWAA
 SB/ADM/21/0138 – ARKO-AIDOO
SOLOMON
 SB/ADM/21/0155 – ACQUAYE MERCY
STEPHANIE
 SB/PCM/21/0084 – MUFTAWU FAUZIYA
 SB/PCM/21/0181 – KESSE KWAKU
VITIATING OF CONTRAC TS
DEFINITION: Vitiation factors refer to factors which negatively affect
the genuineness of consent of the parties to a contract.
A ‘Vitiating Factor of Contract’ is the technical term for the things which
make a contract void or voidable or unenforceable.
A contract may be vitiated by: mistakes, duress, undue influence,
misrepresentation, unconscionability, public policy or illegality and fraud
MISTAKES
MISTAKES
The general common law rule is that, a mistake made by one or both of
the parties to a contract has no effect on the validity of that contract.
For it to affect the validity of a contract, it must be a fundamental mistake
of fact which destroys the very basis of the contract. When such
fundamental mistake of fact is committed, it is called an operative
mistake.
Mistake may be: unilateral, cross-purpose or common.
UNILATERAL MISTAKES
A unilateral mistake occurs when one party (A) is wrong about an aspect
of the contract and the other party (B) is aware or ought to have known
that A is mistaken.
If B is not aware that A is prevailing under a wrong perception, the law
does not consider it to be a mistake.
In unilateral mistake only one party is mistaken.
If the mistake relates to the fundamental nature of the offer the contract
can be voided.
CATEGORIES OF UNILATERAL MISTAKES
There are two categories of unilateral mistakes. Namely:
 Mistake as to document one is signing: unilateral mistake concerning the
terms of the contract- void contract See Hartog v Colin & Shield [1939]
 Mistake as to the identity of the person one is contracting with:
this occurs when one party – usually deceived by a "rogue" – believes
themselves to be bargaining with another, uninvolved, third party. In a
typical situation of this kind, the contract will either be void for mistake,
or voidable for fraud.
MUTUAL/CROSS PURPOSE MISTAKES
Mutual mistake occurs when the parties are thinking different things yet
both parties are unaware that they are at different wavelengths. (where the
parties are at cross-purposes with one another).
If, from the parties’ words and conduct, only one possible interpretation of
what was agreed can be deduced, the contract will still be valid. Otherwise
it will be void.
See Addai v Pioneer Tobacco Co Ltd [1989-90]
COMMON MISTAKES
Common mistake is where the mistake is shared by both parties, is fundamental and
directly affects the basic definition of what the parties are contracting for. The mistake
will render the contract void if it robs it of all substance.
 Res Extincta - Mistake as to the subject matter: where unbeknown to both parties
one purports to buy something that is already totally destroyed and therefore non
existent.
 Res Sua - Mistake as to ownership: This category of fundamental mistake refers to
where unbeknown to both parties, one purports to buy something he/she already
owns. See Cooper v Phibbs (1867)
SUMMARY OF THE EFFECTS OF MISTAKE
 At worst, mistake generally makes A contract voidable, not void.
 Nonetheless, a unilateral mistake has no consequence.
 A cross purpose mistake makes a contract void because there is no
consensus. A common mistake either res sua or res extincta makes a
contract void.
 A common mistake affecting the quality of the subject matter entitles the
affected party to damages.
REMEDIES FOR MISTAKE
Common Law remedy
 contract is ‘void ab initio’ from the beginning.
 no property will pass and no obligations can arise under it.
Equity remedy
 if the contract is void under common law, it may still be voidable under equity law
 contract may be rescinded
 property will continue to be passed and obligations will arise unless/until the
contract is rescinded. however, the right to rescission may be lost
DURESS
DURESS
Occurs when one party exerts improper pressure on another party and that party feels
they have no choice but to enter into the agreement or transaction as a
result. Duress makes the agreement voidable.
The offer and the acceptance may seem to have met but the two cannot be said to lead
to a genuine consensus ad idem. See McCord v. Goode, 308 S.W.3d 409
The court considers factors such as:
 The seriousness of the improper pressure.
 Whether the complaining party protested.
 Whether the complaining party had a real choice or realistic alternative to entering
the agreement.
ECONOMIC DURESS
Economic duress also called business compulsion, refers to one party's
improper or illegal conduct that causes the other party's fear of economic
hardship and the fear prevents the party from engaging in a commercial
agreement with free will. See D & C Builders v Rees [1966]
 Note: Legitimate Economic pressure (when economic pressure is
proper) does not constitute duress.
UNDUE INFLUENCE
UNDUE INFLUENCE
Undue influence is similar to duress in nature, but the key differing factor is
that duress is based on a threat, whilst undue influence will be based on a
relationship that has been exploited.
Undue influence makes a contract voidable, not void ab initio.
Therefore, the plaintiff may: repudiate the contract once the undue
influence ceases to operate on him or affirm the contract by express
words or unequivocal acts. Undue influence may be: presumed or actual
TYPES OF UNDUE INFLUENCE
 PRESUMED UNDUE INFLUENCE: arises by operation of law once certain
facts are established.
The law will presume undue influence in the following two instances:
 when there is subsisting trust, confidential or fiduciary relationship between the
parties, with one party being dominant and the other being servient. Examples of
such relationships; lawyers and clients, trustees and beneficiaries, doctors and
patients, parents and children
 if the terms of the contract are so overwhelmingly tilted in favor of one party and
against the other that the court’s first reaction is to presume that the bargain was
not between approximately equal parties
TYPES OF UNDUE INFLUENCE
 ACTUAL UNDUE INFLUENCE: Actual undue influence occurs
when a party claims and proves that he or she entered into a contract
with the other contracting party against his or her free will and under
the direction and dominance of another person.
 Here, there is no presumed dominant-servient relationship between the
parties. Nor does the contract on its face, have to look overwhelming
lopsided. In a claim for undue influence it has to be proven that the
undue influences overcome their free will.
MISREPRESENTATION
MISREPRESENTATION
A misrepresentation is a false statement of fact, inducing another to enter
into a contract. Such false statements can void a contract and in some
cases, allow the other party to seek damages.
 Misrepresentation is a basis of contract breach in transactions, no matter
the size, but applies only to statements of fact, not to opinions or
predictions.
 There are three types of misrepresentations—innocent
misrepresentation, negligent misrepresentation, and fraudulent
misrepresentation—all of which have varying remedies.
THE NATURE OF MISREPRESENTATIONS
An actionable misrepresentation must be;
 a false statement of fact, not opinion or future intention or law.
 STATEMENTS OF OPINION: A false statement of opinion is not a
misrepresentation of fact, some expressions of opinion are mere puffs.
However, where the person giving the statement was in a position to
know the true facts and it can be proved that he could not reasonably
have held such a view as a result, then his opinion will be treated as a
statement of fact.
THE NATURE OF MISREPRESENTATIONS
 STATEMENTS AS TO THE FUTURE OR INTENTION:
A false statement by a person as to what he will do in the future is not a
misrepresentation and will not be binding on a person unless the
statement is incorporated into a contract. However, if a person knows that
his promise, which has induced another to enter into a contract, will not in
fact be carried out then he will be liable.
 STATEMENTS OF THE LAW: A false statement as to the law is not
actionable misrepresentation because everyone is presumed to know the
law. However, the distinction between fact and law is not simple.
TYPES OF MISREPRESENTATIONS
 Fraudulent misrepresentation is a statement that the defendant made knowing it
was false or that the defendant made recklessly to induce the other party to enter a
contract. See Japan Motors Trading Co Ltd v Randolph Motors Ltd[1982-83]
For fraudulent misrepresentation, the plaintiff may do one of the following:
 Sue the defendant for damages in the tort of deceit
 Affirm the contract and then sue the defendant for the tort of deceit
 Repudiate the contract or have it rescinded by the court (with or without claiming
damages for the tort of deceit)
 Refuse to perform his obligation under the contract and then use the
misrepresentation as a defense.
TYPES OF MISREPRESENTATIONS
 Negligent misrepresentation is a statement that the defendant did
not attempt to verify was true before executing a contract. This is a
violation of the concept of "reasonable care" that a party must
undertake before entering an agreement. The remedy for negligent
misrepresentation is contract rescission and possibly damages.
 In negligent misrepresentation, the aggrieved party has to: sue the other
party for damages in the tort of negligence
TYPES OF MISREPRESENTATIONS
 Innocent misrepresentation is a false statement of material fact by
the defendant, who was unaware at the time of contract signing that the
statement was untrue.
For innocent misrepresentation, the plaintiff may do either of the following:
 Affirm the contract and treat it as binding.
 Rescind the contract by notifying the other party and where necessary,
obtaining the court’s assistance to secure restitution.
 He may sue for indemnity for things created by the contract.