This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
The outward form of offer and acceptance may exist while in reality there is either no agreement at all, or one which is voidable at the election of one party thereto. This state of affairs, if due to some defect in the offer and acceptance, may exist by reason of one of two things. First: one party may go through the form of making a contract because of an erroneous belief of some sort. In certain cases contracts thus entered into are valid, in others voidable in others void. Under this general head are included fraud, either actual or constructive; misrepresentation, mistake and non-disclosure. Anyone of these may exist where the party subject thereto is free from any constraint or overpowering influence. Second: one party may go through the form of making an agreement because his mind is so overpowered that he apparently makes a contract, but does not really consent thereto. Under this general head are included duress and undue influence. Either of these may exist where the party subjected thereto is informed of all the material facts. It is possible and not uncommon for a combination of these two general types to exist; that is, the party seeking relief may be under some overpowering influence and at the same time under some erroneous belief concern-ing some material fact. Either or both of these states of mind may be farther complicated with weakness of mind, drunkenness, and the like, not sufficient to destroy the canacity of the party if free from restraint. deceit, and the like; yet making the person in ques 319 tion peculiarly susceptible to the effects of the restraint or deceit to which he is subjected. These questions will be considered separately as far as it is practicable. The cases in which the erroneous belief of one party is due to the intentional false statement of the other are usually the simplest. The cases in which the erroneous belief of one party is due to the innocent false statement of the adversary party come next. Those in which the erroneous belief of one party are not due to anything that the adversary party has said or done are in many respects the most difficult of all. For these reasons fraud will be considered first, innocent misrepresentation will be considered next, and mistake and non-disclosure will be considered last of all. The reasons for considering analogous types of mistake, misrepresentation and fraud together, instead of considering all the types of fraud together, then all the types of misrepresentation together and then all the types of mistake together will be considered hereafter. The problems which arise out of fraud misrepresentation or mistake as to a matter of law, are much more alike than, for example, fraud as to a matter of law is like fraud as to a matter of fact. They are, as a rule, more difficult than the problems which arise out of fraud, misrepresentation or mistake as to matters of fact. For these reasons, fraud, misrepresentation, and mistake as to matters of law will be considered after the corresponding topics which involve questions of fact.