BUSINESS LAW

Business Law



Introduction3

Effect of Undue Influence on the Validity of Contract3

Genuine Consent in Contract3

Factors for Vitiating the Contract4

Misrepresentation4

Untrue Statement4

Statement of Opinion and Intention5

Types of Misrepresentation5

Mistake6

Types of Mistake6

Effects of Mistake7

Situations of Mistake7

Duress8

Legal Effect of Duress8

Undue Influence8

Proof of Undue Influence8

Related Parties Agreement8

Non Specially Related Parties9

Veil of Incorporation9

Meaning of Veil of Incorporation9

Circumstances of Veiling the Incorporation10

Fraud or Improper Conduct10

For Revenue Advantage10

Avoiding the Legal Obligation11

Agency or trust11

Public Interest11

Welfare Legislation11

Single Economy Entity12

Enemy Character12

Conclusion12

Business Law

Introduction

In the contract of the law, the specific terms are made in the agreement where two or more then two parties or entities promises and sign the terms of the contract. As law of contract is said to be the heart of the business entities so therefore many legal concerns are made. These concerns are offer, offeror, offeree, promises to perform the agreement, valuable consideration, time of the offer and the terms of the offer. For the validity of the contract genuine consensus is necessary in the contract in order to achieve the terms and agreement of the contract. The validity of the contract also requires the agreement of both the parties regarding the terms and conditions. If one party vitiates the contract while other fulfill the terms then the contract has either the element of the misrepresentation or mistake or duress or undue influence. If the contract has these elements then the court have to veil the incorporation and changes the law according to the situation. The present study is about the effect of the misrepresentation, mistake, duress and undue influence on the validity of the contract. The study also included veil of incorporation and the circumstances in which veil of incorporation was removed by the court.

Effect of Undue Influence on the Validity of Contract

Genuine Consent in Contract

An agreement is said to be the contract if both the parties agree to the term of agreement. In (Adeola v. Henry Stephens & Sons Ltd), an agreement is said to be the contract if no one impose the parties through the help of fraud. Genuine consensus must be the result of the negotiation between the parties (Barnett, 1993, 421).

Factors for Vitiating the Contract

There are certain factors which vitiating the contract validity and put the negative impact on the contact between both the parties. These four factors are misrepresentation, mistake, duress and undue influence. These factors vitiate the laws differently which means that some factors just make an agreement voids while other factors make an agreement voidable or illegal (Barnett, 1993, 421).

Misrepresentation

Misrepresentation is the vitiating factor of the contract whose presence vitiates the contract from becoming the binding contract. Misrepresentation is defined as the statement which is untrue because of the some past or present facts made by any of the party in order to induce the other party (Warren, 1928, 309-339). The definition defines the some misrepresentation features, which are as follows:

Untrue Statement

Misrepresentation in the agreement makes the contract as the untrue statement but evidence must be there which shows that the contract is ...