1. Explain the types of mistakes and the types of misrepresentation which can give rise to a court being required to interpret a contract. What remedies are appropriate to each type?
In the law of contracts, mistake refers to the belief in a set of facts or fact that is erroneous and, therefore, not available. Mistake often arises in relation to the conditions and terms of the contract. One or both of the parties to the contract may rely on a fact or set of facts as forming the conditions or terms of the contract. In circumstances where it is later obtained that the set of facts was erroneous, they are held as mistakes in contract. There are two broad categories of mistakes depending on the parties involved. In cases in which only one party to the contract relied on the mistake, the mistake is unilateral and the remedy for such mistake lies with the doctrine of equity as the courts will examine the circumstances in determining the fate of the parties. On the other hand, where the mistake is relied upon by both parties, the mistake is called a mutual mistake. In such cases, the contract is likely to rely on other factors outside the mistaken facts. That is to say the contract is likely to be performed and both parties would discharge their duties in respect of the other unmistaken facts.
Misrepresentation refers to untrue set of facts that are adduced by one party with the intention of luring the party into contracting. Misrepresentation have the false elements in them and it is this false statement that leads the other party into entering the contract. In the law of contract, there are four main types of misrepresentation. Fraudulent misrepresentation refers to the false statements which are intended to mislead one party into contracting. The remedy for the misled party is rescission of the contract and sue for damages. Negligent misrepresentation at common law refers to the misrepresentation that arises from the conduct of the party that is primarily due to his or her negligence and failure to act with due care and diligence. The misled party is entitled to rescind the contract and sue for damages. Negligent misrepresentation under the Misrepresentation Act, 1967 refers to false statement that arise due to the negligence of the party. This misrepresentation is guided by statute which provides for rescission as the remedy. Finally, wholly innocent misrepresentation refers to false statements that are given by a party unknowingly. The remedy for such is rescission by the misled party. It is the only misrepresentation that does not render the contract void as all the others render the contract void. For the latter, the contract is voidable at the option of the misled party.
2. Describe the type of assignments which may occur. Give two examples of each. Consider what requirements are necessary to make an enforceable assignment.
Assignments refers to the legal transfer of contractual rights from one party to the other, often called the third party. In that context, assignments involve the expansion of the privity of contract from the standard two parties to a third party. Assignments are often of two types, the equitable and the statutory assignments. Both of them relates to assignment of a thing or a chose in action.
Some of the conditions important for the enforcement of an assignment include: that the assignment must be complete, that it must be unconditional, that the assignment must be in writing and notice of the assignment must be communicated to the promisor in writing.
Statutory assignments arise from statutory provisions. This is to say statute envisages the assignment of the right by one party to the third party. A good example is the assignment that arises in respect of a sanctioned driver of an insured vehicle. In the event the driver gets injured in an accident, it is upon the insurer to pay compensation even though he was merely a third party.
On the other hand, equitable assignments fail to meet the requirement of statutes and are, therefore, entertained outside statute. However, as long as the conditions mentioned have been met, the court would enforce an equitable assignment. A good example is the assignment of debt in which party A may transfer the debt by party B to party C. Party B is required to pay as long as the conditions for assignment of debt were fully fulfilled.
