Avoidance Doctrines

Question 1

Impossibility

Answer 1

In most jurisdictions, the avoidance doctrine of impossibility will allow a party to avoid the contract. Impossibility is when an unforeseen, unexpected, event occurs after the formation of the K, but before performance is due, that makes performance impossible. Traditionally, it involves the destruction of a thing essential to the K.

Question 2

Questions to determine whether impossibility will excuse liability under a K are:

Answer 2

1. Has the party’s performance been made impossible?
2. Did the party wanting to be excused cause the impossibility?
3. Was the impossibility caused by the occurrence of an event, the nonoccurence of which was a basic assumption on which the K was made?
4. Did the party wanting to be excused assume the risk of the nonoccurence of the event which now makes the performance impossible?

Question 3

Incapacity/Infancy

Answer 3

In most jurisdictions, infants under the age of 18 lack the capacity to contract. The contract is voidable at the option of the infant, however, infants may not disavow contracts for necessities such as food, clothing, shelter, etc.

Question 4

Duress

Answer 4

Duress, as an avoidance doctrine, consists of a wrongful act that overcomes the other party’s free will when entering into a K. The wrongful act could be tortious or criminal conduct or just wrong in the moral sense. Overcoming the other party’s free will means the other party felt they had not other choice but to enter in to the K.

Question 5

Undue Influence

Answer 5

Undue influence, as an avoidance doctrine, consists of a dominant party taking advantage of a weaker party. Weaknesses include a variety of things such as age, immaturity, illness, trauma, etc. Undue influence often occurs in fiduciary (by law the dominant party must act in the best interests of the weaker party) or confidential relationships (over time the dominant party must act in the best interests of the weaker party) between the contracting parties.

Question 6

What if neither type of relationship is there for undue influence? (I CAUSED)

Answer 6

1. Insistent demand that the business be finished at once
2. Consummation of the transaction at an unusual place
3. Absence of third-party advisors to the servient party
4. Use of multiple persuaders by the dominant side against a single servient party
5. Statements that there is no time to consult financial advisors or attorneys
6. Extreme emphasis on untoward consequences of delay
7. Discussion of the transaction at an unusual or appropriate time