disaffirmation


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Related to disaffirmation: reassign
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Notice that nowhere in Elder's does the Court explicitly declare that when a party loses an unknown disaffirmation power because she or he exercised contractual rights adversely to the other party, such a loss of power was the jural consequence of affirmation of the contract by way of election.
But that is because Ewart was basically concerned with cases where the relevant (62) disaffirmation entitlement was expressly contained in and conferred by the instrument that created the contractual relationship in question, and he viewed the power and consequences of election as deriving from the terms of the contract itself.
68) But in the relevant passage of the Elder's judgment where the concept of an 'adverse exercise of rights' is introduced (69) the Court implies nothing about the need for temporally prejudicial conduct on the part of the one subsequently claimed to have lost his or her erstwhile disaffirmation entitlement.
Provided that a party's acts suffice to support a reasonable belief in the other party that a choice against disaffirmation has in fact been exercised, need the former party actually know that an election was vested in him or her by reason of the event that, as a matter of law, entitled disaffirmance of the contract?
However, a stable and just conception of affirmation of a contract by election must hinge at least on a proper understanding of the mental componentry of the mechanism by which a party is found, or deemed, to have affirmed his or her contract, and consequently to have lost his or her erstwhile disaffirmation entitlement.
However, the fact that the law recognizes a distinction between actual election and imputed election (above), and calls them both 'election', instantly implies that the presence of a specific intention, say to abandon the relevant disaffirmation power, is not necessary for a binding affirmation by way of election (although it may of course be sufficient).
Certain formulations of the 'imputed election' concept would seem to entail such a conclusion--namely, that a party can be held to have affirmed a contract even though she or he was innocently unaware of the alternative disaffirmation entitlement, hence providing no foundation for the formation of any 'elective intention' whatsoever, actual or objective--although we may well question whether such cases could then sensibly be regarded as involving 'election' at all.
Although the power-holding party must 'intend' to do the acts that objectively constitute affirmation (in the sense of performing those acts 'knowingly' and 'voluntarily' with a view to recognizing, at least conditionally, the continued existence of his or her contractual obligations), (103) the resulting loss of the disaffirmation power is, definitionally, unintentional because of a legal rule under which one's act of signifying assent to the continuance of the contractual relationship results in the loss of something that one did not, or might not, wish or intend to lose.
The affirming party must intend to do the acts that would indicate, objectively and unequivocally, a non-disaffirmatory choice made, accompanied by sufficient knowledge of the legal alternatives available, but there is no additional requirement of a specific intention to bring about the very loss of the inconsistent disaffirmation power, which is effectuated by operation of law.
Although affirmation need not be 'intentional' in the sense that loss of the relevant disaffirmation power was something that the electing party specifically intended when performing, deliberately and voluntarily, acts that objectively demonstrated an unequivocal decision against disaffirmance of the contract, the authorities are nevertheless unanimous that that objective decision must, to some extent at least, be an 'informed' one: (109)
Needless to say, it is beyond question that the elector must at least know the facts upon which the alternative and inconsistent disaffirmation power depended (knowledge of the serious breach, repudiation, misrepresentation, non-fulfilment of contingent condition, or whatever); (110) all the controversy and uncertainty pertains to the further question of whether the allegedly electing party must also have understood that, as a legal consequence of those known facts, she had available to her the inconsistent jural alternative option of disaffirming the contract.
112) Some courts simply omit discussion of the nature of the knowledge required, (113) while others speak only of knowledge of the facts that triggered the disaffirmation entitlement.