Undue influence – plain unfair pressure
Undue influence is any other unfair pressure placed on one party by
another to enter into a contract, which does not amount to physical
violence.
Misrepresentation – they lied to me!
A misrepresentation is where one party has lied in the forming of a
contract. It could be some time before the contract is formed, but if one
party enters into the contract on the basis of lies, this again cannot be
regarded as true agreement.
Mistake – we got it wrong
Sometimes one or both parties form a contract and then afterwards find
that they have done so on the basis of some false assumption.This is not
necessarily a situation of deceit, it could be that parties were genuinely
mistaken. An example would be if a contract was formed to buy six cakes
from a bakery, but unknown to both parties they had already been bought
and taken away by another customer. Here, even though the contract was
correctly formed, there would be no subject matter, or goods to be bought
and sold, so the court would declare the contract void.
Illegality – a contract to break the law
Again, this could arise where there is a well formed contract, but what if
the agreement involved something unlawful? An example may be a
contract to pay someone to break into an office and steal something. It
would make a nonsense of the law if it supported such a contract, and
indeed the contract would again be void.
These reasons for unfairness are known as vitiating factors, as they vitiate,
or deny the existence of, a binding agreement. They are obviously very
important in ensuring fair play in a business environment, but also of
importance to a consumer. If a brochure gives misleading information, or a
seller makes false claims about a product (either knowingly or innocently),
it is not fair that the buyer of the service or product should be bound by
the agreement with no remedy. This essential unfairness in forming a
contract is the subject of this part of the book.
148 Contract law