Defenses

Question 1

Lack of Capacity Categories

Answer 1

• Minors
• Intoxicated Persons
• Mentally incompetent persons

Question 2

Lack of capacity General rule

Answer 2

an incapacitated defendant has the right to disaffirm the contract

(she does not have to disaffirm, but she can if she wants to avoid the k)

Question 3

Implied affirmation after gaining capacity

Answer 3

• If someone gains capacity, they impliedly affirm the k if they still reap the benefits.
  
  • e.g. minor turns 18 and waits 3 months before rescinding k.

Question 4

Exception to incapacity defense

Answer 4

• An incapacitated party is liable for necessaries (i.e. food, shelter, clothing, or medical care), but only for their reasonable value, not the k price.
• Have to pay restitution, not k price. Reasonable value

Question 5

Ambiguity/Misunderstanding

Answer 5

• If neither party has any idea about the ambiguity or misunderstanding, k not enforceable.
• Parties go home without a transaction. If one party knows about it, hold it against them.

Question 6

Mutual mistake about a material fact

Answer 6

• If both are mistaken about the material fact, not enforceable.
• BUT, if both are only mistaken about the value of the item, still enforceable.

Question 7

Unilateral mistake

Answer 7

• Courts reluctant to let mistake off the hook, because the other party is relying on it.
• BUT, if party knew or should have known it was a mistake, not enforceable.
• Can’t take advantage of someone’s obvious mistake.

Question 8

Effect of Unconscionability on the rest of the K

Answer 8

Empowers a ct to enforce all or part of an agreement.

Question 9

Unconscionability tests

Answer 9

• party must be subject to unfair surprise(e.g. all your stuff repossessed)
• k must have oppressive terms (e.g. acceleration clause that allows company to repossess despite paying 90% of the balance).

Question 10

When Unconscionability is tested by the ct

Answer 10

• Unconscionability is tested by the court at the time the agreement was made.
• MBE usually tests over this.

Question 11

Unconscionability of long term k that now looks one-sided/unprofitable to one party

Answer 11

This is not unconscionable

Question 12

VA unconscionability

Answer 12

applies only to formation of k, whereas good faith obligation applies only to performance or enforcement of the k.

Question 13

economic duress

Answer 13

• bad guy makes an improper threat, e.g. threat to breach the k.
• vulnerable guy- no reasonable alternative, e.g. cannot mitigate damages

Question 14

Most commonly tested topic

Answer 14

Staute of Frauds

Question 15

When is a writing required under the SoF?

Answer 15

MY LEGS

• marraige
• year
• land
• executor
• goods 500+
• suretyship

Question 16

Marriage & SoF

Answer 16

• Kx in consideration of marriage are subject to SoF, NOT a promise to marry!
• e.g. I promise to marry you—not within SoF, but cts likely won’t enforce it.
• e.g. I promise not to go after the house if we get married—within SoF

Question 17

SoF Year Requirement

Answer 17

• Kx which cannot possibly be completed in 1 year or less.
  
  • Look at the dates!
  • e.g. job k that binds party for more than 1 year, or k for concert more than a year from now.
• It does not matter if performance actually takes more than a year.
  
  • As long as full performance within a year was theoretically possible, no writing is required by the SoF. Incl. lifetime kx.
  • But no date needs to be specified

Question 18

Land Sale/Transfer of an interest in real prop and SoF

Answer 18

• Includes transfers of interest of land for more than one year
• Authorizing an agent to enter in land is within SoF only if original underlying k is within SoF.

Question 19

Executors & SoF

Answer 19

Promises by executor of an estate to pay the estate’s debts from some other source of funds/out of his own pockets within the SoF.

Likely not to be tested

Question 20

Suretyship and SoF

Answer 20

• A promise to answer for the debt of another person,
  
  • e.g. If he doesn’t pay you, I will.
• If surety is an answer on the exam, it’s likely the wrong answer.
• But watch out, not the same as a mere promise to pay money.
• Promises to pay $$ not necessarily within the SoF. e.g. I’ll pay you to do that for him.

Question 21

VA SoF

Answer 21

Contract to devise property by will

For an oral agreement to make such a devise enforceable despite SoF, the following requirements must be met:

• agreement must be certain and definite in its terms;
• acts done in part performance must have been done pursuant to the agreement
• k must have been so far executed that a refusal to enforce it would operate a fraud upon the party rendering services and, if found unenforceable, party rendering services may seek restitution

Question 22

K modification and interaction with SoF

Answer 22

The modification must be in writing only if the k as modified (not the original k) is within the SoF

Question 23

Oral modification clauses under the CL

Answer 23

• unenforceable.
• You can generally modify a k orally under common law even if you have agreed not to!

Question 24

UCC oral modification clauses

Answer 24

clauses that prohibit oral modification are enforceable unless waived

Question 25

Adequate writing- UCC

Answer 25

• must contain a quantity and be signed by the party to be charged with breach
• Doesn’t matter if party suing signed it and put quantity if party to be charged did not.

Question 26

Adequate writing- CL

Answer 26

• must have all material terms and signed by party to be charged with breach
• Material terms=who and what who it’s between and what it’s about

Question 27

Adequate writing in VA

Answer 27

writing need not conclusively establish existence of a k so long as it provides a basis for believing that the offered ev rests on a real transaction

Question 28

SoF exceptions- land sale/real prop

Answer 28

• Leases of one year or less;
• Part performance of real estate- need 2 out of 3: some payment possession improvements

Question 29

Performance and SoF

Answer 29

Full performance of service k satisfies SoF, but part performance does not

Question 30

Types of UCC SoF exceptions

Answer 30

• Goods accepted or paid for by buyer;
• Custom-made goods;
• Judicial admission;
• Merchants’ confirmatory memo;
• Suretyship
• main purpose

Question 31

UCC SoF Exception

Goods accepted or paid for by buyer

Answer 31

• SoF defense for any remaining goods not accepted/paid still valid.
• But, cannot apportion one high value item, esp. if all buyer paid was a deposit.
• So exception made if buyer paid a deposit on a high value item.

Question 32

UCC SoF Exception

Custom-made goods

Answer 32

• need to show a substantial beginning to satisfy exception
  
  • i.e. that the goods are custom made and not suitable for others.

Question 33

UCC SoF Exception-

Judicial admission

Answer 33

if a party admits under oath that she had a deal, then she will lose her SoF defense.

Question 34

UCC SoF Exception

Merchants’ Confirmatory memo

Answer 34

One party can use its own signed writing to satisfy the SoF against the other party if:

• Both parties are merchants
• Writing claims agreement and has quantity;
• and There’s no written obj. within 10 days.

BUT, objection must be that a k existed. Objection to the terms themselves actually fills SoF requirement, but smallest quantity agreed upon is all that’s enforceable.

Question 35

UCC SoF Exception

Suretyship

Answer 35

the main purpose exception. If main purpose in surety is to benefit the payor, not within SoF/writing not required.