Factors that May Invalidate a Contract

This chapter deals with three topics: ‘mistake’, ‘duress’ (physical and economic) and ‘undue influence’ by one party over another. A mistake could be a common mistake, mutual mistake, or a unilateral mistake. A unilateral mistake may be a mistake about the terms of the contract or a mistake as to the identity of one of the parties to the contract. Traditionally a person would act under duress when he was being threatened with death or injury to himself or to his family or friends, or to his freedom. In a more recent development, wrongful or illegitimate threats to a victim's economic interests have also been accepted as a form of duress. The equitable doctrine of undue influence covers a loose group of different types of behaviour, including the use of relationships of trust or personal influence to persuade or bully a vulnerable individual into entering into a disadvantageous contract.