Defects of consent and misrepresentation
Disappointment..................................................................................................................2
Civil law..............................................................................................................................2
English law.........................................................................................................................2
Grounds for avoidance (vitiation from the consent)............................................................3
A. Mistake..........................................................................................................................3
Requirements any legally relevant mistake must meet.......................................................7
a. The mistake is caused by incorrect information given by the other party........................9
b. The mistake is caused by non-disclosure by the other party..........................................10
c. Common mistake..........................................................................................................11
English law.......................................................................................................................11
German law......................................................................................................................11
Duty to investigate vs risk.................................................................................................11
B. Fraud/ deceit................................................................................................................12
French law........................................................................................................................14
German law......................................................................................................................14
Dutch law.........................................................................................................................14
English law.......................................................................................................................14
EU law..............................................................................................................................14
C. Threat...........................................................................................................................15
Third reason for avoidance of a contract..........................................................................15
French law........................................................................................................................15
Dutch law.........................................................................................................................15
German law......................................................................................................................15
EU law..............................................................................................................................15
English law (duress)..........................................................................................................16
Overall.............................................................................................................................16
D. Undue influence (common law)/ wrongful exploitation (civil law)................................16
Fourth ground for avoidance of the contract.....................................................................16
French law........................................................................................................................18
German law......................................................................................................................18
EU law..............................................................................................................................18
English law (undue influence)...........................................................................................20
,Dutch law+ UNIDROIT Principles of International Commercial Contracts...........................22
E. Misrepresentation (English law)....................................................................................24
a. No general duty to disclose information.......................................................................24
b. misrepresentation........................................................................................................24
Terms, representations and misrepresentations...............................................................27
Disappointment Assumptions and expectations are in principle of no relevance to the
law: as long as they are not explicitly mentioned to the other party as
being vital for someone’s consent
Sometimes the law must intervene
Can I avoid the contract?
Should I then be able to claim back the painting or should I have better
investigated what its true provenance was?
Civil law The perspective of the party in error
If the intention to be bound is the most essential element in the
formation of a contract, then his intention must be properly formed
‘Defect in the intention’
Wrong assumption must affect the validity of the contract
A party must able to invalidate the contract where the defect is serious
enough
Three defects of consent
Vices du consentement (mistake)
Willensmangel (fraud)
Wilsgebreken (threat)
Dutch law provisions
Art. 3:44 BW
Art. 6:228 BW
German law provisions
§§119 ff. BGB
French law
Arts. 1130 ff. Code Civil
In addition to these grounds, several jurisdictions also allow avoidance of the
contract for undue influence
English law The perspective of the party who caused the error
This party may have made false statements or remained silent while it
ought to have spoken
Misrepresentation (self-induced misapprehension)
Requirement for the contract to be avoided by the innocent party
‘English law rarely allows a remedy for mistake’
Rationale
, emphasis on
protecting who avoidance
the believes an for mistake
reasonable agreement would
reliance of did come frustrate
the other into being this reliance
party
Grounds for avoidance (vitiation from the consent)
A. Mistake Rules on the avoidance of a contract for mistake (erreur, Irrtum, dwaling) in civil
law
Requirements to establish that there is a mistake
1133 CC (characteristics)
1136 CC (mistake about a value of a good)
1135 CC (minor error does not constitute grounds for nullity)
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