CONT101 SPRING Flashcards
(54 cards)
Mutual Mistake
Both Parties are mistaken
Mistake of Fact
Relates to Basic Assumption
Material Fact
Impacted party did NOT assume risk
Mutual Mistake: Sherwood v. Walker
both parties think cow is barren and price cow accordingly; K is avoided
Mutual Mistake: Beachcomber Coins v. Boskett
both parties think the dime was rare; it wasn’t; and K avoided (seller was at risk)
Unilateral Mistake
Only one party is mistaken (to avoid K, all of above + mistake would make K unconscionable or other side knew, had reason to know, or caused mistake)
Unilateral Mistake: Stare v. Tate
divorced couple; wife’s attorney makes a mistake; husband’s attorney catches mistake and doesn’t inform; husband sends letter bragging; K not enforceable because husband knew of the material mistake
Fraud
Misrepresentation of 1) present 2) material fact that 3) the other party justifiably relies on
Fraud: In the Inducement
lie to get someone to sign the K
Fraud: In the Execution
trick into signing something other party doesn’t know is a K
Nondisclosure
one party stays silent as to a material fact that the other party doesn’t know about
Duress
improper threat that deprives party of meaningful choice to contract
voidable at the election of the party against whom the duress was practiced
Duress: Kelsey-Hayes Co v Galtaco Redlaw Casting Corp
galtaco raised the pricing on brake castings that kelsey-hayes relied upon; kelsey-hayes strongly protested the actions as a breach of K; b/c kelsey-hayes was unable to find a reasonable alternative and would suffer greatly from the lack of production ct found economic duress
Economic Duress
threat related to economic prospects
Economic Duress: Selmer Co. v. Blakeslee-Midwest corp
the mere stress of business conditions will not constitute duress where the D was not responsible for the conditions; it would be different if the P’s duress was a product of the D’s behavior
Undue Influence
intense pressure on a party who seems weak minded or highly susceptible
Domination OR relationship
Unfair persuasion
Unconscionability
terms or bargaining process so one-sides as to be unenforceable
Requires both Procedural Unconscionability (defect in the bargaining process like surprise or absence of meaningful choice) and Substantive Unconscionability (problematic terms)
Unconscionability: Ryan v. Weiner
man signed over the deed to his house thinking it was a security deposit; no cash was received for signing over the house and there was no release of liability; additionally it was a one-sided bargain with ryan being distressed and the threat of being homeless
Statute of Frauds
Applies to K made in consideration of marriage, suretyship, one year, UCC, real Property
Satisfied by:
Performance (at CL, full performance of a service K was enough)
Writing: signed by party against whom K is being enforced (must indicate K has been made, ID the parties, and contain essential elements of K)
Illegality
K is void if its subject matter is illegal, though K ancillary to illegal activity may be enforced
Against Public Policy
a court must make two findings before invalidating a K on public policy grounds: that a valuable social interest exists and that enforcement of this contract will materially harm that interest, directly or indirectly.
Duty of Good Faith and Fair Dealing
an implied obligation requiring parties to act honestly and reasonably in fulfilling their contractual duties
applies once the contract has already been FORMED
Misrepresentation
The misrepresentation was fraudulent or material
it induced the recipient to enter into the contract
the recipient justifiably relied on the misrepresentation
Opinion
if the assertion of fact that is false is not actually an assertion of fact, but is an opinion.
Concealment
an action intended or known to be likely to prevent another from learning a fact is equivalent to an assertion that the fact does not exist.
Non-Disclosure Assertion
1) where he knows that disclosure of the fact is necessary to prevent some previous assertion from being a misrepresentation or from being fraudulent/material
2) where he knows that disclosure of the fact would correct a mistake of the other party as to a basic assumption on which that party is making the contract AND if non-disclosure of the fact amounts to a. failure to act in good faith (requires party to have ACTUAL knowledge of the mistake)
3) where he knows that disclosure of the fact would correct a mistake of the other party as to the contents or effect of a writing, evidencing or embodying an agreement in whole or part
4) where the other person is entitled to know the fact b/c of a relation of trust and confidence between them
