2021 01 21 Module 3

Contract law governs the validity and enforceability of agreements through specific vitiating elements, including exemption clauses, misrepresentation, mistake, duress, and undue influence. Exemption clauses must satisfy rigorous tests of incorporation, construction, and legislative compliance to serve as a valid defense. Misrepresentation—a false statement of fact inducing a contract—renders an agreement voidable, with negligent misrepresentation offering the most favorable remedy due to a reversed burden of proof and significant damages. While mistake is a rare, drastic remedy rendering contracts void *ab initio*, duress and undue influence provide equitable protections against improper pressure. Specifically, the *Royal Bank of Scotland v Etridge* framework dictates that banks must ensure weaker parties receive independent legal advice to avoid constructive notice of undue influence, thereby protecting the integrity of third-party guarantee contracts.