Vitiating factors: misrepresentation (innocent, negligent and fraudulent), and economic duress, and their effect on the validity of a contract.

What this dot point is asking

AQA wants you to explain what makes a contract voidable through misrepresentation and economic duress, define the three types of misrepresentation, set out the remedies, and apply the rules to a scenario.

Misrepresentation

Economic duress

Economic duress occurs where one party uses illegitimate commercial pressure that coerces the other into the contract, leaving them with no practical alternative. The courts ask whether the pressure was illegitimate, whether it left the victim no real choice, and whether the victim protested and acted promptly afterwards (The Universe Sentinel, Atlas Express v Kafco, where a small firm had no choice but to pay extra to a carrier). The effect is to make the contract voidable, allowing the victim to rescind.

Rescission and its limits

The principal remedy for both misrepresentation and duress is rescission, which sets the contract aside and restores the parties to their pre-contract position. Rescission is an equitable remedy and is barred where: the parties cannot be restored to their original positions (restitutio in integrum is impossible); an innocent third party has acquired rights for value; the victim affirms the contract by treating it as continuing after learning the truth; or there is undue delay (laches), as in Leaf v International Galleries, where a five-year delay barred rescission for an innocent misrepresentation about a painting.

A key distinction examiners test is void versus voidable. A vitiating factor such as misrepresentation or duress generally makes a contract voidable: it is valid until the innocent party elects to rescind, which matters because good title can pass to an innocent third party before rescission. By contrast, some factors (such as certain operative mistakes, outside the AQA misrepresentation and duress focus) can make a contract void from the outset, so no title passes at all. The reason inducement is essential is that a misrepresentation that did not actually influence the claimant gives no remedy: in Attwood v Small the buyer relied on his own surveyors rather than the seller's statement, so there was no inducement and no relief. Note too that the measure of damages differs by type: fraudulent misrepresentation attracts the wider deceit measure (all direct losses flowing from the transaction, Doyle v Olby), whereas negligent misrepresentation under section 2(1) is assessed on a similar fiction-of-fraud basis, and innocent misrepresentation gives only damages in lieu of rescission under section 2(2) at the court's discretion.

How vitiating factors are examined

Vitiating-factor questions reward a disciplined route from false statement, through inducement, to classification and remedy, with the void/voidable distinction and the equitable bars to rescission applied to the named parties. The common traps are treating opinion as fact and assuming rescission is always available despite affirmation or delay.