Defenses Flashcards
What are the two categories of the incapacity defense?
(1) infancy/minors
(2) mental incompetence
What happens if the minor disaffirms the K?
Minor has to return any goods received but they aren’t liable for any damages or reasonable value for goods/services
What is the necessity exception under the minors incapacity defense?
A minor’s K for necessaries (food, clothing, shelter, medical care) is voidable, but merchant has quasi K right to recover reasonable value of goods or services
What happens if the mentally incompetent person disaffirms the K?
the mentally incompetent person is obligated to not only return any goods received but IS also liable for any damages or reasonable value for use of any goods or services (unless other party was aware of incompetence then mentally incompetent parties are treated just like minors)
What are the elements of fraudulent misrepresentation?
(1) misrepresentation: D made an assertion inconsistent w/ existing facts
(2) scienter: D made an assertion either knowing it was false OR knowing he had no idea if it was true/false
(3) intent to mislead: D made the assertion for the purpose of misleading the aggrieved party OR knowing there was a substantial likelihood to mislead
(4) materiality of misrepresentation: assertion is likely to induce a reasonable person (objective) or particular person (subjective) to enter into a K
(5) reasonable reliance on the misrepresentation
What are the two types of non-fraudulent misrepresentation?
(1) negligent
(2) innocent
What are the elements of non-fraudulent misrepresentation?
(1) misrepresentation
(2) material of the misrepresentation
(3) reasonable reliance on the misrepresentation
(4) negligent: D would have known the assertion was false if he exercised reasonable care
innocent: D made an assertion not in accord w/ existing facts
What is fraudulent nondisclosure?
Fraud consists of the D’s silence when there was a duty to disclose
What are the elements of fraudulent nondisclosure?
(1) nondisclosure was material to the k
(2) reasonable reliance on the nondisclosure
(3) duty of disclosure and failure to fulfill it
What are the three elements of the duress defense?
(1) threat
(2) that is wrongful in nature
(3) no reasonable choice but to succumb to the threat
What are the two elements of undue influence?
(1) unfair persuasion used
(2) other party was vulnerable to such persuasion
What are the two elements of unconscionability?
(1) procedural unconscionability: bargaining process created an absence of meaningful choice for aggrieved party
(2) substantive unconscionability: K terms are unreasonably favorable to one party
What are the three contexts where public policy is a defense to duress?
(1) subject of K itself is specifically prohibited by law
(2) K formed for purpose of committing a crime or tort
(3) K performance would violate certain freedoms/values designated by the state
