Kaplan Pgs 258-275 Defenses

Question 1

What is the difference between how the common law in the modern law treats minority?

Answer 1

Dash common law: minors do not have the capacity to enter a contract
– modern law: minors can enter a contract, but it is voidable at the option of the minor. Sometimes it can be ratified or the minor can still be liable for benefits he got

Question 2

What is a possible exception to the power of avoidance for minors?

Answer 2

Some jurisdictions say that if a minor is married or emancipated he does not have the power of avoidance

Question 3

What’s a minor disaffirm the contract, what is his obligation?

Answer 3

He hast to return to the other party any good that he got under the contract if they are in his possession when he does affirms. Or if he sold the goods, then he hast to turn over the proceeds from the sale. If he no longer has the goods or the contact was for something like a service that is non-returnable, he has no obligation to compensate the other party

Minority view: he hast to make the other party hall, he is liable for depreciation, he must compensate for services or other non-returnable items, etc.

Question 4

If a minor disaffirm the contract, is he liable for damage, where in tear, and depreciation in the value of the goods that he returns?

Answer 4

No

Question 5

How does a minor ratify a contract once he reaches majority?

Answer 5

By making any manifestation to the other party of an intent to be bound by the original contract or if he keeps using the goods under the contract. But just silence is not enough

Minority: if the minor doesn’t disaffirm within a reasonable time after reaching majority, the contract is deemed ratified

Question 6

What is a minor disaffirm the contract, what happens?

Answer 6

The contract is void

Question 7

Minors are liable for their necessities, but only to what extent?

Answer 7

They only have to pay the reasonable value of those things, not the contract price

Question 8

What is a minority rule when a minor miss represents his age to get goods or services?

Answer 8

He is equitably is stopped from providing his real age in court and he can’t use the defence of infancy

Question 9

What are the two situations that create mental incompetence so that a person cannot enter a contract?

Answer 9

– Cognitive defects: if the person is unable to understand in a reasonable manner the nature and consequences of the transaction
Dash volitional defect: if the person is unable to act in a reasonable manner in relation to the transaction and the other party has reason to know what this condition. I.e.: if a manic depressive enters a contractor in a manic phase and the other party had reason to know about this

Question 10

What is the legal consequence of a minor entering a contract?

Answer 10

The contract is voidable. This means that it is enforcible at the option of the incompetent person, not completely void

Question 11

If a person is mentally incompetent at the time of contracting, can he ratify the contract later when he becomes competent?

Answer 11

Yes, through oral or written manifestation of the intention to be bound

Question 12

If a mentally incompetent person avoids a contract, but had gotten some benefit under the contract, what must you do?

Answer 12

He must make the other party hall and he is also responsible for damage, wear and tear, and other depreciation (unless the other party took unfair advantage of the mentally incompetent person and had knowledge of the incompetence, then he only has to return things “as is“)

Question 13

What are the elements for fraudulent misrepresentation?

Answer 13

– Defendant made an assertion that was inconsistent with existing facts
– he New it was false or didn’t know if it was false and had the intention to miss lead
– it was about something material to the contract
– there was reasonable reliance on the contract

Question 14

What are the two types of misrepresentation?

Answer 14

– Fraudulent misrepresentation

– non-fraudulent misrepresentation

Question 15

What is non-fraudulent misrepresentation and what are its elements?

Answer 15

Miss representation that happens for negligence or an innocent misrepresentation
– defendant made an assertion that was inconsistent with existing facts
– misrepresentation was material
– there was reasonable reliance on it

Question 16

What is the difference between negligent misrepresentation and innocent misrepresentation?

Answer 16

– Negligent: it must be shown that the perpetrator would have known that what he was saying was false if he had exercise reasonable care
– innocent: you must show only that the perpetrator made an assertion that wasn’t true

Question 17

What is fraudulent nondisclosure?

Answer 17

Silence when there was a duty to disclose. You must show that the nondisclosure was material to the contract and that there was reasonable reliance on it

Question 18

Generally there is no duty of disclosure, except under what situations?

Answer 18

Dash if the parties enjoy relationship of trust and confidence: like family members
– if a party made an assertion that was true but ended up not being true
– if there is an obligation of good faith

Question 19

What are the two remedies that someone can get if they have been a victim of fraudulent or non-fraudulent misrepresentation or non-disclosure?

Answer 19

Dash they can avoid the contract
– recession and reliance damages
Dash live with the contract and still for the benefit of the bargain (difference between the value of the goods or services that he actually received in the value of the promised goods or services). Although this option is not available for negligent or innocent misrepresentation

Question 20

A common law what are the two situations that dress would be available?

Answer 20

Dash if the party had to sign the contract under force of physical compulsion
– if he had to sign the contract under threat of unlawful activity against himself or family

Question 21

What are the elements for modern duress?

Answer 21

Dash a threat must be made
– that is wrongful in nature
Dirt and leaves the aggrieved party with no reasonable choice but to succumb to the threat

Question 22

What are some situations that would count as duress because the aggrieved party had no reasonable choice but to succumb to the threat?

Answer 22

Dash if there was no adequate or reasonably priced substitute for the thing that the perpetrator is threatening to withhold
– if the breach would cause the aggrieved party to break his own contracts
– if having to sue for damages is in adequate to redress harms to the aggrieved party

Question 23

What happens if a contract was entered under duress?

Answer 23

Contracts made under physical compulsion are void, and those entered under other forms of duress are voidable

Question 24

What must the aggrieved party do if he avoids eye contact because of duress?

Answer 24

He gets restitution of any benefits that he conferred and he must return excess value of benefits to the perpetrator

Question 25

When does undue influence apply?

Answer 25

When someone is vulnerable but not incapacitated and they succumb to untoward bargaining tactics and pressures from the other party that fall short of fraud or duress

Question 26

What are the elements of undue influence?

Answer 26

– Unfair persuasion

– the other party was vulnerable to that persuasion

Question 27

What happens if there has been undue influence?

Answer 27

– The contract is voidable at the option of the aggrieved party
– the aggrieved party gets restitution of benefits he confirmed but he also has to return the value in excess of those benefits to the other party

Question 28

What is unconscionability?

Answer 28

When a party uses inappropriate bargaining tactics to take unfair vantage of a vulnerable party and produces unfair results

Question 29

What are the elements of unconscionability?

Answer 29

– Procedural unconscionability: the bargaining process that made the contract created an absence of meaningful choice
– substantive unconscionability: The terms of the contract or unreasonably unfavourable to the aggrieved party

Question 30

What are some classic scenarios where unconscionability would be present?

Answer 30

Dash if someone is vulnerable because of a language barrier or age poverty
– if someone has no bargaining power because the contract was take it or leave it
– find print terms that are complex, arcane, and hidden
– grossly excessive price
– provisions that are grossly unfair

Question 31

What are remedies for unconscionability?

Answer 31

– The court can refuse to enforce the contracts
– the court can exercise the offending clause and enforce the rest
– the court can limit the application of the clause to avoid an unconscionable result

Question 32

What is the timeframe for figuring out unconscionability?

Answer 32

The time that the contract was formed, not the time that the dispute arose

Question 33

What is the public policy defense?

Answer 33

Contracts will not be enforced when doing so would violate or undermine an important public policy, such as:
– the subject matter is prohibited by law: prostitution, gambling, bribery
– the purpose was to commit a crime: hiring an assassin
– the purpose was to commit a tort: hiring someone to spread lies
– it violates values or freedoms: prohibit someone from marrying

Question 34

What are the sources of public policies?

Answer 34

Legislation and judicial decisions

Question 35

What are contracts that often fall under the public policy defense?

Answer 35

– Unreasonable noncompetition agreement
– sales of goods through bribery
– sales of goods intended for unlawful use
– light liability limiting provisions
– unlicensed goods or services

Question 36

Are all noncompetition agreement violative of public policy?

Answer 36

No, only those that present an unreasonable geographical barrier, duration, or term.

Question 37

What will courts often do to fix a noncompetition agreement that violates public policy?

Answer 37

Use the blue pencil rule to remove the offending part and keep the good stuff. I.e.: they may only enforce the first two years of a five-year noncompete clause

Question 38

What types of things can a liability limiting provision in force and what kinds of things can they not?

Answer 38

Dash they cannot limit liability for tortoise or intentional harms, but they can limit it for negligent behaviour