Monthly Archives: March 2013

Misrepresentation. Page 110

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A misrepresentation can be a statement made before a contract or in a contract. It may be a term.

Misrepresentation gives the right to void the contract. This right can sometimes be lost/

Damages for misrepresentation vary according to the nature of the misrep – fraudulent or negligent or innocent. Damages may be available for the tort of deceit or negligent misstatement.

Misrepresentatyion Act 1967.

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A contract may be rescinded for misrepresentation even if the misrep is a term of the contract.

If the misrep was a promise and not a statement of fact then probably no remedy will exist..

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STATEMENT OF EXISTING LAW OR FACT WHICH INDUCES A CONTRACT.

A misrep must misstate the law or a fact to be actionable. Statement of opinion is not actionable  Bisset v Wilkinson 1927.

A statement of opionion which cannot be supported MIGHT be a misrep.

Smith v Land House Corporation 1884 – someone said a man was a most desirable tenant when the tenant was in arrears.

Edgington v FitzMaurice 1885. A man who expresses an opinion that he does not hold is committing misrep.

Kleinwort Benson Ltd v Lincoln City Council 1999. A misrep can lead to restitutionary remedies for mistake in law.

For a misrep to be actionable it must help induce a party to contract. It does not need to be the predominant or only reason why a party signed the contract. Ity must have been reasonably important in persuading him to sign.

redgrave V Hurd 1881. A party might have been able to find out that the misrep was wrong. The misrepresentee can still claim misrep even though he had the chance to find out that he was misled and failed to take the opportunity.

The misrepresentee must show that the misrep induced him to sign the contract. A court will ask if the said misrep would persuade a reasonable man/.

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MISREPRESENTATION BY SILENCE.

Misre usually requires a statement – oral or written.

Silence can SOMETIMES be seen as a statement. Spice Girls Ltd v Aprilia World Sergic BV 2000.

A statement which true must be corrected if it later becomes false due to a change in situation. 1936. With v O’Flanagan 1936.

A statement which is literally true can be a misrep if it is misleading. Dimmock v Hallett 1866.

uberrimae fidei contarcts require the disclosure of relevant info such as for insurance contracts. Lambert v CO-OPERaTIVE INsurance Society 1975.

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CATEGORIES OF MISREP

Fraudulent

Negligent or at common law. A special relationship gave riseu to duty of care to the representee. Hedley Byrne v Heller 1964.

Statutory misrep – no reasonable grounds for belieivng the statement was true under the Misrep Act 1967.

Innocent – no grounds for believing it was false.

Different remedies depending on the category.

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REMEDIES FOR MISREP

These vary under common law in contract and in tort. They also vary under the Act. Rescission and damages are the two remedies.

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RESCISSION.

Under common law is a contract is induced by misrep then rescission is frequently used as a remedy. Whether the misrep was innocent, negligent or Fraudulent rescission can be used in all three cases.

The court will then try to put the parties in the position in which they would have been ahd the contract never taken place. Return of goods and monies.

Rescission must be sought by the claimant it does not occur automatically.

Misrep renders a contract VOIDABLE  and NOT void!!!!!!

Rescission is claimed by notifying the other party.

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LIMITATIONS ON RESCISSION.

The right to rescind may be lost.

If a party was aware of the misrep and carries on anyway then he is affirming the contract. Long v Lloyd 1958.

If there has been a great space of time between signing the contract and the decision to rescind then this right to rescind may be deemed to have been waived.  Leaf v International Galleries. 1950. 5 years after the contract the misrep was found. It was too late to rescind.

In fraudulent misrep a wronged party would be allowed much longer to find the misrep and rescind.

If restitution is impossible then the right to rescind may be lost. If the property has been destroyed, consumed or inextricably mixed with other party then this may be the case. Clarke v Dickson 1858.

Pecuniary payback MIGHT be ordered in the case of the property being consumed.

If rescission would impact on a third party then there MIGHT be no right to rescind. In the case of a rogue who sold goods to an innocent third party the misrepresentee will probably seek to have the contract declared void for mistake because thus gives him a better chance of recovering the goods.

Under Misrep Act the court may grant damages instead of rescission if this is equitable.

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DAMAGES.

There are damages for non-fraudulent misrep.

Fraudulent misrep – there are damages for tortious deceit. For this the misrepresentee must show that the misrep was made knowing that this was a lie or that the misrep was reckless. Derry v Peek 1889.

Damages for tortious deceit – put the innocent party where he would have been had it not been for the contract. This is NOT the same as putting him in the position he would have been if the misrep had been true

East v Mauruer 1991. The claimant got damages for misrep. He bought a business which was not as profitable as he was told. He got damages taking into account the profit he should have made.

 

Damages cannot be too remote.

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Hedley Byrne v    Heller  1964. Negligent misstatement that caused economic loss MIGHT be actionable.

A statement of opinion can sometimes be negligent misstatement.

A representor will be open to action if he makes a statement which he does not have reasonable grounds for believing – this can be negligent.

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BURDEN OF PROOF

The claimant must prove that the misrep was made and induced the contract. Defendant will then be liable for damges unless he can prove that there were reasonable grounds for making the statement.

 

Howard Marine Dredging and Co v Ogden and Sons 1978. The defendants made statament relying on a register of ships. The statement turned out to be wrong. Their consulation of the Register did NOT make their belief reasonable. It was about the barge’s capacity. In the ships documents the true figure was there.

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MEASURE OF DAMAGES.

Royscott Trust Ltd v Rogerson. 1991. Court of Appeal – damages will be awarded for all loss. This means that losses need not have been reasonable forseeable to be recoverable.

Nigligent misrepresentor treated the same way as a fraudulent misrepresentor.

Misrep Act says damges can be awarded in lieu of rescission.

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A dream of a Jewish jockey.

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I had a dream a few nights ago about being on a street. It was nighttime. I saw two Jewish cousins coming towards me. These men are about my age. I knew the younger one well. I knew who the older one was. Both are likable and neither has in any way ever crossed me. I had a brief catch up conversation with them. The elder stuck out in my mind since he is a jockey. I thought of the other as he was a game show contestant and I wish to be one. I have seen the older chap mentioned in the press. I think they were attired in school dress.

The lust that dare not speak its shame.

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People will talk fellatio even with their mouth full. Blowjobblowjobblowjobblabalbla.

Why do people so seldom speak of cunnilingus? Maybe they are tongue-tied. Has the pussy got your tongue?

Though I am no Tom Daley I have acquired a taste for diving – muff diving that is. I never liked seafood but my new hobby keeps Derbyshire neck at bay. When they say that pussies taste like fish are we talking Loch Fyne Seafood Restaurant or are we talking more Burger King’s Ocean Catch? And you can catch more than you wanted. You cannot get crabs through oral – apparently.

A lot of girls are faintly ashamed of their girlie places. What is the most decorous word to use? Personally I hate the c word for them. The most delicate expression I have come across is lady flower. The trouble is some of them have that cottage cheese disease – no thanks. And as for a yeast infection – bread is fattening so avoid it. One can of course come across vag veg but I am not partial to mushrooms.

A somewhat flavourful one is good but not sweaty. I have become a bit of a connoisseur in my old age.

By name and nature.

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I met a dermatologist who did not inspire confidence. Her name was Candida.

Would you trust a financial adviser named Mr Phibbs?

Do not purchase scent from an outlet named Mr Smellie’s. In Italy no one purchases it from the shop owned by Signor Profumo.

Unilateral mistakes. Page 97

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Courts are loathe to find a contract is void at law if a mistake is unilateral.

To void a contract under those circumstances would infringe upon the rights of th other party.

A court will probably void a contract due to unilateral mistake if one party knew of the other’ party’s mistake and sought to dereive a benefit from the mistake.

A court will probably void a contract where one party created the mistake in the mind of the other party. There is a large group of cases called mistaken identity cases.

A non-mistaken party does not have any reasonable interest to protect if he created the mistake or he was aware of the mistake in the mind of the other party.

A mistake can be induced in the mind of the mistaken party by inaction.

A contract MIGHT be valid at law but relief is provided through equity.

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MISTAKEN ASSUMPTIONS OR PROMISES.

A mistake might mean that a contract is negatived.

This can only be so if one party was aware of the other party’s mistake.

Smith v Hughes 1871. New oats and old oats. A party shows the other party some oats. One party wants to buy a type of lats. By mistakje he think he is getting the other sort of oats. This contract was held to be valid. There was no mistake as to what was primised.

The la takes a subjective approach to such matter.s

The law takes a caeat emport apprioach – the buys must watch out for what he is buying.

If a party snaps at another’s mistake then this will mean that the contarct is void.

Hartig v Colin and Shileds 1939,.

The fur for sno shoes – the weight unti being wrong.

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Mistakes as to identity

Shog Finance v Hudosn 2003. House of Lords. Mistaken identity cases usually invo,lve a rogue who used a false identity to get goods, services or money.

The rigue disappears. The vendir sesk to rcover goods from an innocent thrif party to whom the rogue has sold the goods.

The court must decide who will bear the cost of the rgue’s deceptiom.m If the contarct between the rogue and the vendor is good then the rogue acquired legal title to the goods and the teh vendor will bear the cost. If the contract with the vendor was invalid then the godos will be retruend to the vendor and the third party will lose out.

Such a contract between rogue and vendor os voidable for misrepresentation but the vdnor must void the contract before the rogue sells the goods to thr third party otherwise it is too late to rescind.

A vendor assumes a commerical risk by selling on credit or accepting a cheque. If he is ripped off then he has to carry that cost.

CUNDY V Lindsay 1878. If a rigue steasl the identity of a real persn and the vendor honestly beives that the rogue is the real person and the real person does not realise that his identity has been stoeln for this purpose then the contract is void. The vendor gets his goods back.

Dennat v Sknner – identity must be critical to the formation of the contrac.

It is assummed that if a vendor meet a rigue in person then the vendor accepts that trhe rogue is who he says he is. Therefore the venodr must take the cost of ebinf defraded. This is calle dinter praesentes.

Phillips v Brooks 1919.

The presumption of inter praesentes can be rebutted. Shogun Fiancen Case.

Ther was some dissent in the Shogun Fiancen case. some law lords said that tehre can be no disctintion drawn between a fraud in writing or face to face.

Contarcts formed ata  distance through writing etc… are probably voidable for misyake.

Where there is a sface to face meeting the vendor is presumed to itned to contarctw tih the rrpson he meets. The vendor can void th contarct for misatyke but must do so before the rogue seells the good to a thrif party.

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DOCUMENTS SIGNED UNDER A MISAPPREHENSION AS TO THEIR CONTENTS.

A party will usually held liable for an contract he ahs signed even if he has not read it. A party may be able to get out of a contract if he can show that he was not negligent in fialing to read or undersand the contract. The misunderstanding must be very serious for him to be able to get out of his obligations.

Non est factum.

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MISTAKE IN EQUITY.

This relates to the decision in the Great Peace and is a total muddle.

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THREE FORMS OF EQUITABLE RELIEF

Rectification

Specific Performance

Rescission.

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RECTIFICTATION.

This is about correcting a mistake that is not in the making of the agreement. Where a written contract or deed fails to conform to the intentions of the parties rectification comes in.

A uniltareral mistake MIGHT be grounds for rectification. This is where the other party knows of the mistake and does not draw the attention of the other party to this.

Robert v Leicesterhsire CC 1961.

Rectification is about the recording of the agreement not the agreement itself. It is about a slip of the pen. The deal is for US dollars but someone accidentally wrote Canadian dollars etc…

This is an equitable device.

Rectification must be claimed within a reasonable period of time.

A high degree of proof is needed for a court to rectify a contract. George Wimpey UK Ltd v VI Components Ltd 2005.

Chartbrook v permissom Homes Ltd 2009 – House of Lords held that if the parties had a common intention than effect may be given to this in order to bring in a rectification. It must be demonstarted that the partie were of one mind as to their agreement but that it was misrecorded.

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SPECIFIC PERFORMANCE.

This is a discretionary form of equitable relief. This responds to the individual case. Denny v Hancock 1870.

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RESCISSION.

This is the third from of equitable relief. It is very confused. In this context rescission is by court order and not at the election of one of the parties.

This form of relief is not available when one party made a mistake as to the commerical consequences of a contract.

The court can rearrange matters to put the parties where they wanted to be. This is an equitable device. It is different from the legal doctrine of mistake.

lord Denning in Solle V Butcher said that the equitable doctrine of mistake was flexible.

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The Great Peace.

A ship called The Cape Providence was sticken. The ship’s owner contracted with the owners of another vessel – the Great Peace – to come to the rescue of the Cape Providence. The owner of the Cape Providence believed the ships were only 35 miles away and told this to the Great Peace. The Great Peace believed this.

Then the Cape Providence owner found out the ships were 400 mils apart. He hired another much nearer ship to rescue the Cape Providence. He refused to pay the Great Peace. He tried to say the contract was void for bilateral mistake.

The court found that the contract was valid and the Great Peace got paid by Cape Providence.

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Lord Phillips MR said that Solle v Butcher and Bell v Lever Brothers are impossible to reconcile.

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Equitable relief is barred sometimes by the rights of a new innocent buyer. The impossibility of restitutio in integrum and lapse of time.

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laches

 

Mandela – prepare for his passing.

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He is 95 years old. This man cannot have long to go. The old boy was born in 1918 in case your arithmetic is not up to it. Strange to think that he was born when the Great War was on. He is rather unwell. It is surprising that no biopic has come out about him. There was Invictus and that rugby film but these do not tell his whole life story. 

The film they make of his life will surely be a hagiography. This should not be so. To be sure he was a man of exceptional physical courage. Apartheid was an unfair system, it inflicted many indignities on black people, it was anti-capitalist, it abridge personal liberty in an unwarrantable fashion and it made communism more popular. This is not to say that everything the ANC did was good or even excusable. He was a good president in terms of achieving rapprochement. In other regards he was cataclysmic. The murder rate went sky high on his watch – one of the highest in the world. He said barely a word against tyrants like Mugabe. The AIDS crisis took a deadly grip on South Africa. He is a flawed hero.

Cartoon becomes reality.

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I know a chap who looks like a 19th century racist cartoon stereotype of his racial group. The thing is that he racial group is precisely my racial group. Not just white, not just north-west European, not just British but precisely Irish. He has that devilish grin about him but he does not look dim as some English Victorian cartoonists drew us. 

I am not self-loathing. I shout it from the rooftops. I am Irish. I am a proud Irishman. I am not just proud because I am Irish – some nationalities do not have a great deal to be proud about. The fact is that we are, in many categories, world-beaters. 

We used to be slammed as potato faces. I have to acknowledge that in a few cases Irishmen look like that. Take Bertie Ahern. He did not have our legendary gift on the gab. I on the other hand have snogged the Blarney Stone. 

A decade of loss

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I thought of it last night. Maybe it was the very anniversary. I threw my mind back to entering that Istanbul hotel room for the first time with her. What shall I call her? Dreamgirl? Maybe that is too soppy. How blithe she was. How fortunate I was to find her. How idiotic I was to lose her. I could have treated her much better. Then I might be with her still. Love may come but once in a lifetime and I ruined it. 

I saw a decade of loss because it is an attention grabbing title. In fact it is about seven and a half years of loss – 10 years since I had her. I remember speaking to her on the phone one night shortly before out holiday to Turkey together. She intimated that it was a special day – that there was something I ought to remember. I was at a loss to think what it was. ”Ok”, she said in her monotone,”it is my birthday.” I was agahst. I apologised profusely. She has told me the exact date some time before. Well, there we are.

Knowing then what I know now – being older and less unwise. I shall not call myself wise! I would be much more solicitous of her. I wonder what she is doing now – Grease Lightning passim. I often imagine she is an air hostess for Lufthansa. A leggy blonde with a command of English and a desire to see the world. 

I pined for her last night. I can honestly say that not a day goes by that I do not think of her. I rue my short-sightedness.

Mistake. Page 90

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Mistakes can be UNILATERAL or BILATERAL.

A bilateral mistake is also called a common mistake or a mutual mistake. They may both be mistaken but with regard to different things.

At common law an operative mistake will make a contract void at common law. In equity the said mistake makes the contract VOIDABLE not void.

Mistake cases overlap a lot with misrepresentation cases. Parties often seek to claim a case is about misrepresentation and not mistake because the remedies for misrepresentation are better. Misrepresentation Act 1967 makes misrep easier to prove.

Courts are reluctant to find mistakes operative since this rewrites contracts. If a contract is void for mistake this also impacts on third parties.

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MISTAKE AT COMMON LAW AND IN EQUITY.

If a mistake is operative then the contract is void at common law.

If a mistake is bilateral the court MAY find that the mistake is so important that the contract is invalid. There is no consensus because the arties meant different things.

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MISTAKES OF LAW AND MISTAKES OF FACT.

English law normally bars relief where the mistake was one of law and not of fact.

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ABSENCE OF GENUINE AGREEMENT.

Both parties are mistaken but about different things.

The mistake negatives the agreement.

Raffles v Wichelhaus 1864. A ship was to carry cotton from Bombay. There were two ships called Peerless and they got mixed up about which ship. They each intended a different ship. The court ruled that there was no contract.

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COMMON MISTAKE.

The parties make a mistake about a criticasl part of their contract – they BOTH make the SAME mistake. Bell v Lever Brothers 1931. Lord Atkins said such a contract is void ab initio. The mistake disrupts consensus.

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NON EXISTENCE OF THE SUBJECT MATTER.

Parties may contract about a subject matter that turns out not to exist but neither party knew it. This res extincta.

This contract is impossible from the outset.

The dead horse is an example.

Coutourier v Hastie 1856. A cargo of corn was sold. The corn was on a ship. Unknown to both parties the captain of the ship sold the corn to someone else before the contract was signed. The law is that where goods have perished or been sold before a contract is signed then there is no contract. Section 6 of the Sale of Goods Act.

A party might – MIGHT – be able to sue for non-delivery.

A party cannot rely on mistake where a party had no reasonable ground for believing in the mistake OR the mistake was implanted into a party’s mind maliciously.

Galloway v Galloway 1914.

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MISTAKES AS TO OWNERSHIP.

A party contracts to buy something that he already owned. This res sua. Cooper vPhibbs 1867. Bligh v Haugh 1966.

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MISTAKE AS TO THE POSSIBILITY OF PERFORMANCE.

PHYSICAL impossibility

legal impossibility

commerical impossibility.

If one party assumed the risk then he must bear the consequences of a valid contract.

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MISTAKE AS TO THE QUALITY OF THE SUBJECT MATTER.

bELL V lEVER brotthers Ltd 1931.

Chairman and Vice Chairman of Lever bros got payouts for meritorious service. They retired. They had also breached their contracts in a manner that made the contracts terminable at the discretion of Lever Bros. Lever Bros did not know this. The two men were laid off due to restructuring.

Lever Bros found that the two men had been trading on their own account while in the employ of Lever Bros. Lever tried to set aside the lay offs and recover the payouts.

House of Lords ruled 3-2 that the severance contracts were valid.

Lord Atkin said that mistake as to the quality of the subject matter may render a contract invalid. ”it will not affect assent unless it is the mistake of both parties.”

The men were allowed to keep their payouts,

Mistake cases seldom succeed.

The Great Peace 2002 is another mistake case. Lord Phillips MR upheld Lord Atkin’s ruling. Mistake at common law has a narrow ambit.

A mistake as to the quality of the subject matter must be sufficiently fundamental to void a contract.

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FUNDAMENTAL MISTAKE GOING TO THE ROOT OF THE CONTRACT.

This is a vital mistake going to the core of the contract meaning that in effect no agreement was arrived at. This comes from Lord Atkins in Bell v Lever Bros.

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Contracts signed by minors. Page 85.

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Some adults do not have the capacity to enter into a contract – the drunk, the mentally disordered, unincorporated assocations, the Crown

The Minors’ Contract Act 1987 is key. Minors are usually not held to contracts they signed. 

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CONTRACTS FOR NECESSARIES.

”goods suitable to his condition in life” may be provided to minors under the Sale of Goods Ac t 1979 and these contracts are binding. A minor must pay a reasonable price for this. 

Beneficial contracts are binding contracts for minors – these include jobs and education.

Roberts v Gray 1913. A minor broke a beneficial contract and was found liable for it.

 

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BENEFICIAL CONTRACTS OF SERVICE.

Apprenticeship, training, a job – contracts for all these are binding on a minor.

Doyle v White City Stadium 1935.

Proform Sports Managaemtn v Proactive Sports Management LTD. 2006. A contract entered into by Rooney aged 15 was voidable at his option. This contract was not for education or a job so is was not beneficial.

Trading contracts are excluded from this

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VOIDABLE CONTRACTS. 

A party can void a contract before he reaches 18 or shortly thereafter. Otehrwise he ratifies the contract. 

A third party may be involved in a contract and this may cause the minor to lose the right to void the contract. 

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RECOVERY OR PROPERTY.

Minors’ Contracts Act allows the minor to ratify the contract. Goods csn be restored to the other contracting party.