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Misrepresentation and Mistake in Contracts

The document compares misrepresentation and mistake under English and German law, defining misrepresentation as a false statement that induces a contract and mistake as an error affecting contract validity. It outlines classifications and impacts of both concepts, detailing rights of affected parties under each legal system. Additionally, it poses questions regarding the effects of misrepresentation and mistakes on contracts in both jurisdictions.

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Vũ Ngọc Lam Vy
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51 views5 pages

Misrepresentation and Mistake in Contracts

The document compares misrepresentation and mistake under English and German law, defining misrepresentation as a false statement that induces a contract and mistake as an error affecting contract validity. It outlines classifications and impacts of both concepts, detailing rights of affected parties under each legal system. Additionally, it poses questions regarding the effects of misrepresentation and mistakes on contracts in both jurisdictions.

Uploaded by

Vũ Ngọc Lam Vy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

MISREPRESENTATION

ENGLISH GERMAN
LAW LAW

DEFINITION
English law: A false German law: Providing false
statement that induces a information/concealing
party to enter the contract important information
Provisions under the Provisions under the
Misrepresentation Act 1967 German Civil Code (BGB)

Classification

Fraudulent misrepresentation Deceit (arglistige Täuschung)


Negligent misrepresentation and Unlawful duress
Innocent misrepresentation (widerrechtliche Drohung)
Non-fraudulent
misrepresentation

IMPACT

Fraudulent Deceit or unlawful duress:


misrepresentation: rescind rescind the contract and
contract + claim full damages seek damages (§280 BGB).
Negligent misrepresentation: Non-fraudulent
rescind contract, damages misrepresentation: rights under
subject to court discretion the law of mistake or unfair
Innocent misrepresentation: competition legislation
cannot claim both rescission (§263 II BGB and §823 BGB)
& damages simultaneously

QUESTION

1. What is the effect of misrepresentation on a contract?


A) It automatically makes the contract void.
B) It makes the contract voidable at the discretion of the
affected party.
2. When misrepresentation occurs in a contract, what
rights does the affected party have under both English and
German law?
A) The right to rescind the contract and claim damages.
B) The right to rescind the contract but not claim
damages.
MISTAKE
ENGLISH GERMAN
LAW LAW

DEFINITION
English law: An error by German law: One/both parties
one or both parties are not concerned about the
regarding contract declaration’s contents or have
elements, making it void. no intention of making it, then
that declaration can be
avoided

Classification

Common Mistake §119 I BGB: Error as to the


Cross-purpose: mutual content
mistake and unilateral §119 II BGB: Error of statement
mistake §120 BGB: Incorrect
transmission

IMPACT

Common mistake: Void Void declaration of intent


contract if the mistake is Lead to compensation under §122
fundamental or rescission under §143 BGB
Cross-Purposes Mistake: Void
contract in three scenarios:
+ The negligence of the other
party caused the mistake;
+ The parties' intentions were so
cross-purposed;
+ Unilateral mistake

=> Similar to Art.131 Vietnamese Civil Code

QUESTION

1. How does German law treat the impact of a mistake on


the validity of a contract compared to English law?

A) German law applies mistakes to the declaration of intent


and allows rescission, while English law applies mistakes to
the entire contract and allows it to be void.

B) German law applies mistakes to the entire contract and


allows it to be void, while English law applies mistakes to the
declaration of intent and allows rescission.

2. In English law, which type of mistake can render a


contract void?
A) Common mistake.
B) Unilateral mistake.

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