...aspects of rescinding a sales contract in a situation where both parties were unaware of an associated fact in a transaction will be addressed. The scenario that was presented to the class, the prospective car buyer Josh Hartly, was interested in purchasing a new car from a local car dealer. While in the negotiating phase of the car buying process, Mr. Hartly informed the salesperson that he was looking to purchase a certain vehicle with a 3.2 liter V-6 engine and not the 3.9 liter model that was available, as he felt that the 3.2 liter engine would be more economical. Mr. Hartly signed a purchase contract for the vehicle with the 3.2 liter V-6 engine. Unbeknownst to either the salesperson or the buyer the manufacturer of the vehicle stopped manufacturing both the 3.2 liter and the 3.9 liter models and started equipping the car with a newly designed 3.5 liter engine. This paper will cover some of the impact of the above “mutual mistake” from the right of rescission, ethics, and UCC influence. ANALYSIS In the analysis that follows the questions that were posed to the class through the assignment will be covered more thoroughly below. Should parties to a sales contract be able to rescind a contract because of mutual mistake of fact? As you read through the information provided in the scenario you can see that there is an implied mutual mistake that has taken place. According to Twomey & Jennings (2014), “When both parties enter into a contract under a mutually mistaken understanding...
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...I think this an unfortunate situation because a contract was entered into by both parties under false assumptions. A mutual mistake of material fact was made. From the information provided it does not seem it was done intentionally by the sales person so the contract can be rescinded. If the buyer, Josh Hartly, agrees to purchase a car with the new engine that is being manufactured then both parties can continue with the sales contract. One thing to be aware of would be the price difference, if any, between the 3.2 L V-6 engine car and the 3.5 L V-6 engine car. Under certain circumstances, nondisclosure serves to make a contract voidable. As a general rule a party to contract has no duty to volunteer information to the other party. So if information was not asked for the nondisclosure of said information does not impose fraud liability or impair the validity of the contract. There are however exceptions to the general rule. In some states the seller must disclose the information of a serious defect or condition to the other party if it is unknown to them or unlikely they will discover it. But if the seller has no knowledge of the serious defect or condition, they cannot be held liable for failing to disclose it (Jennings & Twomey, 2014). With the information provided, I do not believe that either party acted unethically. The sales person was not aware of the change made by the manufacturer. Though I believe it is the job of the sales person to be up to date on the products he...
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...concerns regarding the fuel economy of the 3.9 liter engine. Josh signs a contract agreeing to purchase a car with the 3.2 liter V-6 engine. What neither Josh nor the salesperson knew was that the manufacturer had already stopped manufacturing both the 3.2 liter and the 3.9 liter, and was equipping the cars with a newly designed 3.5 liter engine. What do you think about this situation? Should parties to a sales contract be able to rescind a contract because of mutual mistake of fact? Why or why not? Did either party act unethically in this case? Why or why not? What application does the UCC have here? Finally, in the overall context of contract law, are there any winners or losers when a contract is rescinded based on mutual mistake of fact? Why or why not? A mutual mistake is when both parties incorrectly believe an important fact to be true or the applicable law to be relevant. The important facts that affect or influence a parties decision are called material facts, and if there is mutual misunderstanding of these facts means contract can be void therefore without legal effect. (John Adamson, 2011) After looking at the facts it seems as though its is more of an error on behalf of the salesman and for me he should rescind the contract and take responsibility for the misunderstanding as it is not the consumers duty to know what engines are being manufactured. They both agreed to a contract that was created under the assumption that the 3.2 and 3.9 V6 engines were...
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...that business. In this paper, we will consider the case of Josh Harty, who wishes to purchase a new car. He chooses to go to a local dealer in motor vehicles. He states clearly to the salesperson that he has a specific car he wants, the 3.2 liter V-6. He chooses it over the 3.9 liter one because he has issues about the fuel economy of the 3.9 liter engine. They come to an agreement about the 3.2 liter V-6 engine car and he signs a contract to purchase it. But both of them don’t know that the vehicle manufacturer had stopped manufacturing both the 3.2 liter and the 3.9 liter engines and was now fitting cars with a 3.5 liter engine which has been newly designed. This is a mutual mistake of facts, which is very unfortunate since the customer does not get what he had wished to get, and the salesperson faces the risk of losing a sales deal. Rescission of the contract is only possible if both parties agree to the rescission. Harty can give an offer to rescind which must be accepted by the salesperson before they rescind the contract. But one party to the contract is not permitted by law to rescind the contract by simply giving a notice to the other party that he wants to do so. “A mutual mistake concerning a material fact entitles the party affected by the mistake to rescind the contract” (legal dictionary, 2015). However, this is only possible if the contract has not yet been completed. If the contract has been completed then rescission would become an injustice to the other party. This...
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...Wayne County sought to purchase a cow from Hiriam Walker & Sons, who were breeders and importers at the time. On May 5, 1886, Walker went to Greenfield Farm and he choose “Rose 2d of Aberlone”. He was told by Walker that the cow was probably barren and it would not be able to breed. Walker informed Sherwood that the price of the cow would be five and one-half cents per pound, live weight, with fifty pounds of shrinkage because she was barren. If the cow was able to breed it would be worth between $750.00 and $1000.00. Sherwood asked the Walker to confirm the sale in writing. This is what the letter read: "WALKERVILLE, May 15, 1886. "T.C. Sherwood, President,...
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...ANN § 28-2-1602: Montana Code - Section 28-2-1602: How written contract may be altered by parties: a contract in writing may be altered by a contract in writing or by an executed oral agreement. An oral agreement altering a written agreement is not an executed oral agreement within the statute authorizing modification of written contracts by an executed oral agreement unless its terms have been fully performed, and performance on one side is not sufficient. Therefore, the contact can be enforced. For Winkel to be entitled to any profit-sharing bonus, the court must find the written employment agreement was altered by an executed oral agreement. Based on the information given, the oral agreement was never executed. Therefore, he is not entitled to profit bonus. The written contract did not mention receiving higher salary and the profit-share. MONT CODE ANN § 28-2-1602 10.7 Mr. Peter Andrus made an offer to purchase insurance for an apartment building from Durick Insurance rejected the offer Mr. Andrus made and made a counteroffer containing an automatic acceptance absent affirmative notification. Mr. Andrus' did not reply to the counter offer. As such the failure to pay the premiums as requested by Durick is notice to Durick of the rejection of the counteroffer. So Mr. Peter Andrus wins. (J.C. Durick Insurance v. Andrus, 1980) 11.4 Chuckrow is only obligated for the original contract price. The preexisting duty Gough had was to construct the trusses...
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...Mistake Mistake exists where parties to a contract think that they have agreed when in actual fact they have not. For a party to be able to set a contract aside on the basis of mistake he has to establish the following. The mistake should be one of fact not law, the mistake must concern a material fact and it must be a reasonable mistake. The types of mistakes in the contract of law include unilateral mistake, mutual mistake and common mistake. Bilateral/common mistake This exists where both parties are mistaken .They would be thinking that they have agreed when in actual fact there is a common mistake on either side, courts have usually allowed both parties to set such a contract aside. The academic argument which is well founded is that such a contract should be treated as void because one of the requirements that is (consensus ad idem) is missing. An error on the part of both parties of a transaction regarding the same matter, such as if two people sign a contract under a certain understanding, while the contract actually conveys a different meaning than they each may have expected. That a mistake of law does not invalidate a contract was held in Ncube V Ndlovu 1985 (2) RLR 281. The appellant seduced a major daughter of the respondent. The appellant then signed an agreement undertaking to pay the respondent damages for seduction. He wanted to avoid the contract on the basis that he was mistaken as to the law that is he did not know that a father has no right to sue for...
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...Running Head: End-of-Chapter Questions Week 1: Assignment Stephen DeMarco MGMT 597: Strat Considrs of Mgrs & Ownrs Devry University Tracy Phillips September 7, 2012 Week 1: Assignment 9.4. Assuming that the Montana law prohibits oral modifications of written contracts without actual performance/execution, then unless some profit-sharing was actually paid, or some memorandum exists from Loren proving the profit-sharing agreement was made, then Dennis cannot enforce the modified agreement, because he cannot satisfy the burden of production necessary to prove the contract's existence. In the area of the ethics of Loren's actions, ethical judgments are subjective, so the question is irrelevant, because it has no effect on the legal outcome of the dispute. The contract is either enforceable or it's not -- that is the only issue. (Winkel v. Family Health Care, 1983) 10.7. Mr. Peter Andrus made an offer to purchase insurance for an apartment building for $24,000. Durick Insurance rejected the offer Mr. Andrus made and made a counteroffer containing an automatic acceptance absent affirmative notification. Mr. Andrus' did not reply to the counter offer. As such the failure to pay the premiums as requested by Durick is notice to Durick of the rejection of the counteroffer. So Mr. Peter Andrus wins. (J.C. Durick Insurance v. Andrus, 1980) 11.4. Mr. Ralph Gough was under a preexisting duty to construct the trusses for...
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...QUESTION 1 IF ONE OR BOTH PARTIES ENTER INTO A CONTRACT UNDER SOME MISUNDERSTANDING OR MISTAKEN ASSUMPTION, IN WHAT CIRCUMSTANCES WILL THE COURT INTERVENE TO HOLD THE CONTRACT VOID AND UNENFORCEABLE ON THE GROUNDS OF MISTAKE? In contract law, a mistake is an erroneous belief made by parties when contracting. Mistakes are not generally enforceable at the law court and are often treated as void or voidable. Mistakes are generally irrelevant, but exception to this places great emphasis on operative mistake which includes common mistake, mutual mistake and unilateral mistake. Mistakes or misunderstanding may render a contract void when the following are presents; * Mistake of the law; When a party enters into a contract, without the Knowledge of the law in the country, the contract is affected by a mistake making it unenforceable on the grounds of ignorance. Note also that the ignorance of the law is not an excuse. CASE Lydia a foreigner entered into contract with Amina in Ghana with the view that, Amina should supply heroine on a contract basis for a token of GHC 5,637,600 for every supply made. Unknowingly to Lydia that it is illegal to trade heroine in Ghana. Hence the contract is void and loses its enforceability at the law court. * Mistake of Fact; This happens where both parties enter into an agreement under a mistake as to a matter of fact essential to the agreement, the contract is declared void. For instance, ‘A’ agrees to buy a certain horse from ‘B’. It turns out...
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...the expiration date, a Big Time manager forwarded a drafted agreement via e-mail, which covered the terms of the agreement. Chou received and responded to the draft in agreement with the terms; however, Big Time did not respond and months later Big Time was no longer interested( Melvin, 2011). The proposed contract existed immediately following the agreement to exclusive rights. The contract from that point was valid for 90 days following the agreement, which obstructed Chou’s ability to negotiate with other distribution outlets. The elements, which validate a contracts formation consist of an offer, BTT offered $25,000 to Chou for exclusive negotiation rights, acceptance Chou accepted the offer and monetary compensation, and finally the consideration for BTT exclusive negotiation rights to the game and Chou $25,000 (Melvin, 2011). The Big Time Toymaker manager drafted an agreement before Chou took initiative; therefore, based on the manager’s initiative resulting in labeling the e-mail with Strat Deal, insertion of key terms, a distribution agreement with prices, times, and various obligations proved mutual assent ( Melvin, 2011). Even without the formal word contract, the e-mail set the tone for an agreement. No matter what e-mail is a valid source of communication; therefore, the impact of the choice of communication remains relevant because the transfer of communications constituted an extension of the...
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...Mutual Mistakes in Contract Law Caryn Williams Southern New Hampshire Business Law MBA--610-X4247 Geri Drelling July 13, 2014 Mutual Mistakes in Contract Law From a personal perspective, this situation is somewhat close to home. I worked as car sales professional for a year and learned many things about the process. In my opinion, Mr. Hartly should have done a bit more research about the models available. In my experience, the consumers I dealt with were more knowledgeable about the products being purchased. In many cases, the consumers would know more about the cars than I would. The internet provided the specifications about the engine and the proper pricing of the vehicle. However, when the consumer was negotiating the pricing and telling the salesperson what he wanted then the specific engine issue should have been addressed right away. As a matter of fact, the specifications of the vehicle are part of the sales presentation and should be given to consumer in the initial discussion. With my knowledge of car contracts, the sales contract is not able to be rescinded due to lack of information. The specifications of the car are on the sticker placed in the window and the information is fully disclose and displayed for the consumer. Contractual capacity is the ability to understand that a contact is being made and to understand its general meaning (Twomey ,2013). However, the fact that a person does not understand the full legal meaning of a contract does not mean...
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...Running head: CONTRACTS Contracts, What Are They? How Do They Work? BUS311 Business Law I 12/17/2012 Abstract In this paper, I will reflect on the operation of contracts. Business law shows how contracts may be classified in several ways depending on the manner in which they are created, expressed, or performed. I have learned a lot from this course and I will use that to help write this paper. In the following paper I will discuss the oral or written contracts; I will discuss express or implied contracts, and will discuss formal or simple contracts. I will also discuss the impact of the contracts in a business and show the true propose of contracts. I will show what is needed in a contract to be legally enforceable. I will discuss how a contract must contain the following six elements: an offer and acceptances, a mutual agreement, a consideration, a competent parties, and legality of purpose, and proper form. All of this will be discussed in depth in the following paper. Contracts Within Business Even though the operation of contracts, business law show how contracts may be classified in several ways depending on the manner in which they are created, expressed, or performed. These includes: either oral or written; it may be express or implied; and it may be formal or simple. A contract is a legally enforceable agreement that is created when two or more people agree to perform or to...
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...Sources of Law a) Constitutional Law b) Statutory Law (Ghana Company Code) c) Executive Decisions: Executive Decrees, Proclamations, Orders Judicial Decision-Case Law: Doctrine of Stare Decisis (Salomon v Salomon) Treatises of Eminent Jurists Restatement of Torts/Restatement of Contracts International Law Treaties (Bilateral and Multilateral). Compare AGOA (Ghana and US) and ECOWAS Treaty (West African sub-region). Readings: Adjei Mensah, Principles of Business Law, Volume I, Part 3 2. Law of Contracts Types (Oral/Written; Bilateral/Unilateral; Executed/Executory, Terms : Express/Implied: Express Contract/Implied Contracts Oral Contracts and the Statute of Frauds (“MYLEGS” Contracts) 1) Marriage 2) Contract for Years 3) Land Contracts 4) Contract of the Executor 5) Guarantor’s Contract 6) Contract of Surety 2) Writing required in the ff cases (i) Real Property Contract including leases, life estate, easements (ii) UCC leases greater than $1,000 (iii) Sale of goods greater than $500 (iv) Lease greater than $1,000 (v) Agency Contract (vi) Promise to make a will (vii) Pre-Nuptial contract (viii) Quantity contract (ix) Executory contract not in writing is not...
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...Assignment Cover Sheet PLEASE NOTE THE DEADLINE FOR ALL BUSINESS SCHOOL COURSEWORKS IS 11.59PM Please ensure you complete both sections of the form and attach it all to the front of your work PART A – To be kept attached to coursework Family Name | | First Name | | Module Title | | Module Code | Wahid | | Akeel | | The legal environment of business and employment | | BFL0041 | Student Number | | Tutorial Group No | | Taught by (Tutors Name) / Supervisors Name | U1257644 | | D | | Jackie lane | Course | | Assignment Title | Accountancy and finance | | Contracts in business | Unless you have been notified otherwise, this coursework must be submitted through turnitin by 11.59PM on the given hand-in date.It is YOUR responsibility to print Assignment Coversheets for manual submissions. You are advised to keep a copy of all your assignments for personal reference. | | Word Count | | | | | 2235 | | | | | Date Submitted | | | | | 16/12/2012 | | | | | Date Due | | | | | 16/12/2012 | | | I confirm that this assignment is wholly my own work unless otherwise clarified and that I have read and understood the regulations in the context of academic misconduct. (please tick box) | yes | | Signed:………………. Akeel Wahid………………………………………………. | ------------------------------------------------- ONLY FILL THIS SECTION IN WHEN COURSEWORK HANDIN IS MANUAL PART B – To be kept in the Department Surname | | First Name |...
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...ASSIGNMENT COVER SHEET This form must be filled in correctly and securely stapled to your assignment or it may not reach your lecturer Circle Program Enrolled | C4TP | Dip Arts | Dip Bus | Dip Tech IT | Dip Tech EE | Dip Health Sc | Assoc. Degree | COURSE NAME: Business Law LECTURER'S NAME: Mardi Szantyr ASSIGNMENT NO./TITLE: Assignment 2 DUE DATE: 1 MAY DATE RECEIVED STUDENT ID NUMBER | 110164786 | FAMILY NAME | He | GIVEN NAME | Shan | ------------------------------------------------- * If a group assignment a cover sheet must be completed by each member ------------------------------------------------- ------------------------------------------------- I declare the following to be my work as understood by the University’s Policy on Plagiarism, unless otherwise cited. ------------------------------------------------- I authorise SAIBT to test any work submitted by me, using text comparison software, for instances of plagiarism. I understand this will involve the University or its contractor copying my work and storing it on a database to be used in future to test work submitted by others. I understand that I can obtain further information on this matter at: http://www.unisanet.unisa.edu.au/learningconnection/student/studying/integrity.asp ------------------------------------------------- ------------------------------------------------- SIGNED: __________________________________ ...
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