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14 - Misrepresentation and Rescission

from Part III

Published online by Cambridge University Press:  19 April 2018

Richard C. Nolan
Affiliation:
University of York
Kelvin F. K. Low
Affiliation:
City University of Hong Kong
Tang Hang Wu
Affiliation:
Singapore Management University
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Summary

A claimant who was induced by a defendant's misrepresentation into entering into a contract is prima facie entitled to rescind it. Nonetheless, it is commonly assumed that a clause (say, a no cancellation, non-reliance or other similar clause) purporting to preclude the right to rescind for non-fraudulent misrepresentation would be effective, even if the clause were contained in the very contract said to be voidable because tainted by misrepresentation. That efficacy is sometimes attributed to the separability of the clause from the rest of the impugned contract, a concept borrowed by analogy from arbitration clauses. On closer examination, however, there seems to be no good reason in principle why such a clause purporting to preclude rescission should be allowed to pull itself up by its own bootstraps.
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Publisher: Cambridge University Press
Print publication year: 2018

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