1. Inducements and Coercion

2. Inducements and Coercion
One cannot induce, coerce or misrepresent another person into a contract
Duress = when instead of acting through personal choice/will/desire, a person acts through fear of personal suffering
Example: If you don’t sign this contract, I will kill you
Misrepresentation
Innocent misrepresentation = untrue statement that is honestly believed to be true

3. Inducements and Coercion
Fraudulent misrepresentation = untrue statement that is made with knowledge that it is false. It has 3 elements:
Knowledge that statement is false
False statement is made to induce party into contract
Innocent party must act on the misrepresentation
Negligent misrepresentation = statement found to be untrue made by person who is in position of trust that is relied on by another person
For instance, a salesperson makes a statement and a buyer relies on it and suffers from it
Negligence is the most common tort

4. Inducements and Coercion
Common mistake = when both parties to the contract know and accept the intention of one another
For instance, if the buyer and seller both believe the property includes right of way to the seashore when nothing actually supports this belief. This error will not create an easement and is viewed by the law as a common mistake between the two parties
Mutual mistakes = when both parties are mistaken about the same material fact
For instance, a seller owns two lakes on opposite sides of Lake Ontario. The seller believes he is selling the property on the north shore, while the buyer believes he is buying the property on the south shore. They are agreeing based on a mutual mistake

5. Inducements and Coercion
Unilateral mistake = when only one party makes a mistake and the other party knows it
For instance, if you think you are entering into a contract with Jen but you are actually entering into a contract with Emily who is using Jen’s identity to misrepresent who she is. It is your mistake that you are entering into a contract with Jen when you are entering into a contract with Emily, and Emily knows about this mistake

6. Inducements and Coercion
If a contract is missing an important element, it may be void or voidable
Void = if a fundamental aspect is missing
The mistake must go to the heart of the contract
Void contracts are a nullity at law and have no effect or force
As far as the law goes, such a contract never existed
No party can enforce it or have obligation under it

7. Inducements and Coercion
Voidable = if the mistake is not fundamental
The mistake does not go to the heart of the contract
Contract is originally valid but capable of being rejected by party who is offended at a later time
Voidable contracts are binding and valid until they are rendered void
It is the choice of the offended party to uphold or avoid the contract