BU231 Chapter Notes - Chapter 8: Caveat Emptor, Rescission, Consumer Protection
Document Summary
The rules of equity require that any party asking to have a contract set aside must also be prepared to return whatever benefit he or she received under the contract. If the mistaken party is unable, the party loses the right to rescind (set aside, undo) Common mistake: when both parties are mistaken about the facts. Unilateral mistake: when one party is mistaken about the facts. There are different types of mistakes: mistakes about the terms, mistakes about the subject matter, mistakes about the identity of the parties. If a contract is void, there is no contract from the beginning (contracts that occurred after are also void) Voidable contracts exist until they are set aise. In order for a third party to receive protection, he must be innocent and have paid value for the goods. In summary, the original owner may recover it only if the original contract is declared void, not voidable.
