Nowadays, almost all business relations are based on properly developed legal contracts so that all their duties and responsibilities are defined. A contract is a significant legal agreement within the frames of which the parties are bound with a number of clearly defined obligations. There are many different forms and sizes of contracts with a variety of durations, financial aspects, employment details, etc. (McKendrick 1). There are also a number of factors that may influence the validity of a contract and its perception by the parties. Each factor plays an important role for a party.
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The current paper aims at discussing the peculiarities of misrepresentation and duress as the concepts of any contract law that touch not only the legal aspects of a case but focus on significant ethical aspects. Misrepresentation and duress have their own definitions, types, judgments, etc. In spite of the necessity to be common for all parties, the essence of misrepresentation and duress in terms of the English law and the UAE law differs considerably. Contract law is the agreement that should clear identify the situation and help the parties be equal; misrepresentation and duress can influence the quality of the contract and have to be properly understood by the English and the UAE citizens.
Misrepresentation and Its Place in the Law
It is easy to find a clear definition of misrepresentation in any legal dictionary and understand its importance. The researchers explain misrepresentation as one of the false statements of law that does not go in line with the facts and does make one party to being able to induce another party to a contract (McKendrick 214). It is a kind of general definition; still, the essence of misrepresentation usually depends on its type.
Types of Misrepresentation
There are three types of misrepresentation considering the intentions of a party that does it that have to be discussed. One of the most evident and influential types is a fraudulent misrepresentation (Koffman and Macdonald 318). It usually takes place when one of the parties intentionally (being aware of a false) represents some false facts in order to make another party accept the contract conditions. However, it also happens in case the party does not check if the chosen facts are true or false and make misrepresentation recklessly without considering the importance of outcomes. The outcomes of the representation of false information are negative and may cause some damage. Negligent misrepresentation is all about the false statements that are inadvertent by their nature when one party introduces false fact being not aware of them. Finally, there is also a kind of innocent misrepresentation when even the party that makes it gives several facts to prove the reasonableness of the chosen statement.
An innocent misrepresentation can provide the injured party with a chance of rescission but never damages (Abe14). Negligent misrepresentation implements the possibility of rights of rescission (only in terms of common law) and damages in tort (Abe 14). A fraudulent misrepresentation supports rescission and the right of damage under any condition in any court. Damage is a kind of compensation offered to a victim in order to cover the harm made as a result of the misrepresentation. As a rule, money is offered. Rescission is another result of misrepresentation as a result of which a contract is ended, and the parties develop the relations as if the contract was never signed. All these types of misrepresentation mentioned above have their own outcomes and the effects on the relations that can be developed between the parties to a contract.
Examples and Judgments
The examples of fraudulent misrepresentation are numerous nowadays. Many people like to make deals online. They buy goods, describe their properties, and give promises about the quality of a product. For example, a person offers iPhone, describes its characteristics, and sells it to a person informing that everything is ok with the device. As soon as a buyer starts using the phone, it is hard to define some shortages. However, it turns out that the battery is too weak, and the phone call was discontinued during a very important meeting. The seller knew about this shortage but did not mention it. The result of this disconnection was a financial fine of a buyer. If a contract is signed, fraudulent misrepresentation is evident, but it is hard to prove that the seller knew nothing about the weakness of the battery. It is better to address a good lawyer and analyze all existing laws to prove the fault of the seller.
However, if the seller knew nothing about this shortage because he did not use for a long time, and that was why he did not mention a true fact, it may be a case of negligent misrepresentation and defined as a civil offence that can be solved in civil court as a rescission. The phone is turned to the seller, and the buyer gets his money back. The same situation without any damages, unawareness of the phone problems, and inabilities to prove a false representation may be defined as innocent misrepresentation. In this situation, a seller may offer an extra battery in order not to cancel a contract.
Laws Related to Misrepresentation
Misrepresentation Act 1967 is a current English act that helps to regulate the conditions of any contract law and analyze the case when misrepresentation takes place. It defines the conditions under which a certain type of misrepresentation happens and the fines that can be used in regards to a party blamed for misrepresentation. The UAE civil law system has Federal Law No. 5 of 1985 according to which misrepresentation is defined as a situation when “one of the two contracting parties deceives the other by fraudulent means by word or act that leads the other to consent to what he would not otherwise have consented to” (Nassif par.5).
Duress and Its Place in the Law
Duress is a kind of illegal coercion that is used by one party in order to induce another party to enter the contract using such methods like threats, blackmail, or other options that can cause financial harm. As a rule, duress may take place if one party of a potential contract is stronger than another party of the same contract. The power of one party can be used opposite to the weakness of another party. Duress is defined by common law as a voidable condition (Burrows 542). This unlawful pressure may be of different reasons in order to achieve different goals. Besides, duress can exist in case one party has to perform an act that can hardly be performed under different conditions. There is always a kind of wrongdoer, who has to make another figure of the contract to do something inappropriate.
Types of Duress
Duress is a type of improper pressure that can differ considering the form it may have. In regards to the options that are possible in the situation under consideration, researchers offer different types of duress. For example, duress can be done over a person, duress of goods can be defined, and economic duress may take place (Burrows 542; McKendrick 293). In dictionaries and books, it is possible to find another classification but of the same meaning:
- Emotional or psychological duress is the situation when some portion of information is used against a person to make him/her doing something illegal or unwanted. For example, emotional duress occurs when some family members are kidnapped, and their physical condition or future health depends on the development of the events. Some people think that even this type of duress has to be a subtype of physical duress because the core of such situation is also making physical harm to people. However, if the situation touches upon two parties, and none of the parties is under a threat of physical abuse, it has to be defined as emotional kind of duress. At the same time, it is hard to define if duress can take place when a person acts under the power of hypnosis. Therefore, the court has to analyze the case thoroughly to define, compare, and analyze such factors as age, gender, health condition, family relation, personal experience, etc. to make sure emotional duress can happen.
- Physical duress is a type of coercion directed to a person that causes pain, harm to health, or threat to life. The aim of such action is to make a person to act or not to act. Duress of this type can be in a form of gun threat, beating, use of drugs, binding, etc.
- Economic duress is one more type of coercion. The situation when one party may threaten another party to make some kinds of financial injuries in order to sign a contract (Ashcroft and Ashcroft 95). At the same time, there are the situations when people just have poor financial circumstances and are ready to take some illegal or inappropriate actions in order to earn. In such cases, economic duress does not occur. That is why the court has to analyze each detail of the case of economic duress.
All these types of duress are more symbolic because it may happen that the situation has the characteristics of two or even three types of duress at the same time.
Examples and Judgments
There is a situation when a person, call him Bob, wants a woman named Julie sign a contract and buy a house within a short period of time. Julie does not want to do it so soon and at such cheap price. Still, Bob insists and uses a gun and threatens Julie’s daughter, who is kidnapped at the moment. Such situation may be as a physical (the presence of a gun in a story), emotional (child’s kidnapping), and even economic duress (the situation of selling a house). If there is no definite evidence to prove that the contract was signed under such threats, the court has to investigate the case, compare information, and gather different pieces of evidence.
Though, if economic duress is understood as a situation when one party has to accept a contract in order not to lose money or protect personal property, this situation cannot be regarded as such because a party that is coerced loses a lot making a deal but saves personal life and the life of a child. This contract can be justified in case the level of harm is lower than the level of harm caused by coercion and if the threat is proved and explained with the help of evidence. For example, someone may see how the daughter was kidnapped during the time when the contract was signed.
Laws Related to Duress
According to English law, duress is a kind of common law defense that may be operated in favor of the party that commits a crime or sign a contract while being forced to do so or being threatened. With the help of English contract law, many unconscionable agreements may be escaped and legally solved if they are defined as the acts done under duress. However, the doctrine of duress is relatively new in English contract law (McKendrick 293). That is why some courts face challenges while defining the nature of crimes and the conditions under which a contract is signed. In their turn, the UAE have their own Civil Code under which duress is can be forcible and non-forcible, material and moral, cause harm directly to a person or his/her family. According to the Article 182, a party that experiences duress to make a deal may not enforce a contract; still, the contract can be defined as valid if the party agrees to its terms after the threat is solved (Hall 37).
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The UAE Law vs. the English Law
Every country has its own laws and rules that have to be followed by the citizens. People have to know the peculiarities of the laws in order to follow them or learn punishment details in case they break the law. The differences between the UAW law and the English law are evident indeed: different traditions, various gender roles, attention to religion, respect to the government, etc. People of these two countries have a rather different understanding of misrepresentation and duress in Contract law and should be compared in terms of these two concepts discussed above.
The UAE and English laws may seem to be similar in terms of misrepresentation’s definition and judgment because both of them have one and the same purpose – to make people follow an order and develop trustful relations. However, there are also many differences that have to be mentioned regarding the situations when the case of misrepresentation should be defined, or the cancellation of a contract should be offered.
Even the definitions of the UAE and English “misrepresentation” vary. The UAE people know misrepresentation as a situation when one party is misinformed by another party with some fraudulent acts or words and agrees with something he/she could hardly agree with in case of being informed. The English people have a simpler definition: misrepresentation is usually a false idea used as the basis for one party to make another party sing a contract.
According to the English law, there are several types of representation. In the UAE, there are no such divisions. It may mean that the Arabs do not actually care about the level of harm caused by misrepresentation but categorize the fraud as one particular reason of harm. In respect to such categorization, the English law presupposes the idea that a contract should not be always cancelled if the case of misrepresentation takes place. In the UAE law, any type of misrepresentation leads to the cancellation of a contract with the necessity to investigate the conditions under which a contract is signed.
In other words, according to the English law, misrepresentation is dangerous and may lead to unpleasant outcomes in case a deceived party suffers from any kind of harm. The UAE law seems to be severer because people take care not only about the actual harm but want to calculate the level of moral damage in addition to possible financial losses. Besides, in the UAE law, both parties have to be in good faith if they want to sign a contract. It is possible to say that, even in terms of the law, the Arabs turn out to be more spiritually dependent in comparison to the reserved and definite English people.
In fact, the UAE and English laws are rather similar in terms of duress, its definition, methods, and outcomes. It is usually a situation when some force is used to make one party sing a contract or act unlawfully under physical or psychological pressure.
The main difference between these two laws is the conditions under which duress takes place. In the UAE law, it is properly stated that if the case of duress happens between a husband and a wife is under a special condition. It is stated that “if a husband coerces his wife by beating her or forbidding her to see her family or the like, to cede to, him a right of hers or to give him property, the disposition will not be effective” (Hall 37). It proves that family relations and gender roles are important for the Arabs even if the law is taken into consideration. The English law has nothing in common: duress has its own definition, and if it is proved, a person can have a kind of additional defense (Whincup 319).
In general, research done in the paper helps to realize how different the laws of two countries can be even if they have one goal to be achieved. The laws make people keep order, decide properly, and choose legally approved methods. However, even the cultural background may presuppose the way of how the law can be treated by different nations and how the cases of violation or disobedience have to be identified. The UAE and English law may have a lot in common. Still, there are also many details like several additional words in definitions or an extra article in the law about “gender role” specification that may considerably change the way of how misrepresentation or duress can be treated by the Arabs or the English.
Nowadays, people like travelling and developing various international contracts for their business. As soon as the decision to make a deal with a foreigner takes place, it is very important to clarify all points of a contract and clear up how such terms like misrepresentation, duress, etc. are defined in order to know what to expect from the law and how to be protected by the law. The English and UAE laws may differ, but they will never allow people making mistakes or wrong decisions without consideration.
Abe, Lisa. “Representations, Warranties and Indemnities for Technology Agreements.” Information Technology Law Spring Forum (2011). Web.
Hall, Marjorie. n.d. The Civil Code. n.d. Web.
Koffman, Laurence and Elizabeth Macdonald. The Law of Contract. New York, NY: Oxford University Press, 2010. Print.
McKendrick, Ewan. Contract Law. New York, NY: Palgrave Macmillan, 2015. Print.
Nassif, Karim. United Arab Emirates: Contractual Misrepresentation under UAE Law. Mondaq (2011). Web.
Whincup, Michael, H. Contract Law and Practice: The English System with Scottish, Commonwealth, and Continental Comparisons. Frederick, MD: Kluwer Law International, 2006. Print.