Those
Chains That Bind You!
Original Source Unknown
Evidence
of the contract between the state and the natural person is the marriage
license, birth certificate, driver's license, social "insecurity" number,
and the like. Of course, the nature of these licenses does not meet
the specific requirements of a contract; however, they do have the
effect of being acted upon like a contract. In past issues we have
addressed the constructive or quasi-contract, and we have a position paper
available on that subject.
We
are often asked how important it is to rescind these contracts, how do
you get rid of them, and what do I do when they send my rescission back
without an answer?
The
answer to the first question is one of individual preference. Obviously,
if a person doesn't want to subscribe to a daily newspaper any longer,
the contract must be terminated; likewise with rescissions of quasi-governmental
contracts created by legislative fiat. If a person likes the terms
and conditions of the contract, they should keep the license. However,
if the terms of the contract are no longer acceptable, the contract must
be rescinded.
Our
position has always been, if you have the driver's license, obey all traffic
regulations. If you have the social security number, pay your income
and social security taxes. However, if you do not want these obligations,
you must rescind the quasi-contract.
A
person must immediately rescind any contract that has been entered into
by fraud and false representation when he learns of the fraud, or the contract
will remain in effect. The courts have said:
"...
but in the view we take of the question of waiver of the fraud by failure
to exercise due diligence to rescind,...
"...
If they proposed to rescind, their duty was to assert that right promptly,
unconditionally, and unevasively," otherwise the affirmation of the contract,
notwithstanding the fraud, would follow. Richardson v. Lowe, 149
Fed Rep 625, 627-8.
"Whatever
the form in which the government functions, anyone entering into an arrangement
with the government takes the risk of having accurately ascertained that
he who purports to act for the government stays within the bounds of his
authority .... And this is so even though, as here, the agent himself
may have been unaware of the limitations of his authority. See e.g.,
Utah Power & Light Co. v. United States, 243 U.S. 389, 409, United
States v. Stewart, 311 U.S. 60, 70; and see generally, The Floyd
Acceptance, 7 Wall 666." Federal Corp Ins. Corp. v. Merrill, 332
U.S. 380, 384.
"Where
a party desires to rescind upon the grounds of mistake or fraud he must
upon the discovery of the facts, at once announce his purpose, and adhere
to it. If he be silent, ... he will be held to have waived the objection,
and will be conclusively bound by the contract, as if the mistake or fraud
had not occurred. He is not permitted to play fast and loose.
Delay and vacillation are fatal to the right which had been subsisted."
Grymes v. Saunders, 93 U.S. 55, 62. Also see Shappiro v. Goldberg,
192 U.S. 232. |
Rescission
of a contract on the ground of fraud is not a mental process undisclosed
and unacted upon. It requires affirmative action immediately on its
discovery; some overt act and outward manifestation of the intention to
clearly apprise the other party to the contract of the right asserted.
Melton v. Smith, 65 Mo. 325; Walters v. Miller, 10 Iowa 427.
The
duty of rescinding arises immediately upon acquiring knowledge of the substantial
and material facts constituting the fraud. It is not requisite that
the defrauded party shall be acquainted with all the evidence constituting
the fraud before the duty to act by way of rescission arises. When
he has evidence sufficient to reasonably actuate him to rescind the contract,
and once he has acted, no subsequent discovery of cumulative evidence can
operate to excuse waiver of the fraud, if such evidence has in the meantime
occurred, or to revive a once lost right of rescission. The election
to waive the fraud once deliberately made is irrevocable. Vacillation
or speculation cannot be tolerated. Campbell v. Flemming, 1 A. &
E. 40; Fry on Specific Performance on Contracts (2nd ed) Sections 703 &
704; Bach V. Tuch, 26 N.E. 1019; Taylor v. Short, 17 S.W. 970.
"If the fraud be discovered while
the contract is wholly executory, the party defrauded has the option of
going on with it or not, as he chooses. If he executes it, the loss
happens from such voluntary execution, and he cannot recover for loss which
he deliberately elected to incur." Simon v. Goodyear Metallic Rubber
Shoe Co., 105 Fed 573, 579. |
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November 2004 |
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