defenses

Question 1

courts may refuse to enforce contracts due to (IT D IP)

Answer 1

1. Impermissible Parties
2. Defects in the bargaining process
3. Impermissible terms

Question 2

impermissible parties

Answer 2

lack of capacity

Question 3

defects in the bargaining process

Answer 3

fraud, mistake, duress, unconscionability

Question 4

impermissible terms

Answer 4

illegality

Question 5

infancy

Answer 5

under the age of 18

Question 6

a contract entered into by a minor may be:

Answer 6

voidable at the minors option

Question 7

a minor may chose to:

Answer 7

disaffirm or ratify the contract upon reaching the age of majority

Question 8

looking older

Answer 8

is not a defense to infancy to a seller because ag is a determinable fact

Question 9

ratification

Answer 9

1. upon turning 18 if the person maintains the contract , or takes actions affirming the contract (like making payments)
2. no additional consideration is required
3. must occur within a reasonable time

Question 10

necessities

Answer 10

contracts for necessities (food, clothing, shelter) are enforceable to prevent fairness

Question 11

determining necessities

Answer 11

depending on the socioeconomic status of the minor
depend on the minors circumstance

Question 12

disaffirmance

Answer 12

1. a minor declares they do not wish to be bound by the contract.
   - so long as it was not a necessity
2. this can occur at any time during minority or within a reasonable time after reaching majority

Question 13

contracts are voidable on the grounds of mental incapacity if:

Answer 13

the person was unable to understand the NATURE AND THE CONSEQUENCE of the transaction at the time of contracting and the other party KNEW OR REASON TO KNOW

Question 14

a contract may be void if

Answer 14

the person was unable to understand the nature and consequence of the transaction

Question 15

evaluating mental capacity

Answer 15

medical testimony, unfair advantage by the other party, observable behavior at the time of contracting

Question 16

intoxication as mental capacity

Answer 16

1. can not understand nature/consequence
2. other party knew or should have known

Question 17

a mistake is

Answer 17

a belief not in accord with the facts existing at the time of contracting

Question 18

Mutual Mistake (AMA no b)

Answer 18

both parties are mistaken about a material fact.
The contract is voidable if:
1. The mistake concerns a basic assumption (important aspect)
2. it materially affects the exchange
3. the adversely affected party does not bear the risk of the mistake

Question 19

rescission

Answer 19

the undoing of a contract

Question 20

unilateral mistake AMA (no b) UK

Answer 20

1. basic assumption
2. material effect
3. adverse party does not bear the risk
4. the mistake would result in an unconscionable outcome OR
5. the other party knew or caused the mistake

Question 21

the party bears the risk of the mistake if:

Answer 21

they consciously assumed with limited knowledge
2. agreed to the risk
3. risk allocated to the party by the court (leaving goods in the hands of someone else)
4. got insurance
5. “as it”

Question 22

a misunderstanding occurs when

Answer 22

the parties use the same term, but each party interprets it differently.

Question 23

a misunderstanding often arises from

Answer 23

ambiguous language
if the misunderstanding concerns a material term, there may be no enforceable contract because there is no meeting of the minds

Question 24

examples of misunderstanding

Answer 24

the peerless case
- each party referred to a different ship named peerless

Question 25

reformation

Answer 25

the court modifies the writing to align it with the agreement actually reached

Question 26

scrivener's error

Answer 26

a clerical or typographical error resulting in a written agreement that does not accurately express the parties' intended agreement

Question 27

scrivener's error remedy

Answer 27

reformation: the court modifies the writing to align it with the agreement actually reached

Question 28

mutual mistake in written expression

Answer 28

both parties are mistaken about how their agreement has been reduced to writing

Question 29

no reformation if..

Answer 29

the court may not change the writing in a contract if: 1. a party has relied on the mistake writing in good faith 2. the mistake was caused by fraud, bad faith, or intentional misrepresentation

Question 30

in a bid for a public works contract recission was allowed if MUG N NP

Answer 30

1. the mistake was material 2. the enforcement would be unconscionable (undue hardship) 3. the mistake was in good faith 4. the plaintiff would not be prejudice by the loss of the deal 5. prompt notice of the error was given

Question 31

as is

Answer 31

goes to the condition (buyer is agreeing to it) - assuming the risk - no warranty as there usually would be - purchaser should examine before contracting

Question 32

final sale

Answer 32

does not go to condition - is being sold final sale for other reasons such as season - defective goods may still be returned because it goes against the warranty

Question 33

a contract is void

Answer 33

a legal nullity -there is no legal force

Question 34

categories of defenses (A, B i. ii. iii)

Answer 34

A. No Contract formed - Misunderstanding B. Contracts formed but Unenforceable - i. incapacity ii. defects in bargaining process (mistake) iii. impermissible terms

Question 35

misrepresentation (A F/M R J)

Answer 35

1. there must be an assertion that is not in accord with the facts 2. the assertion must be either fraudulent or material 3. the assertion must induce the recipient to make the contract (reliance) 4. the reliance must be justified

Question 36

restitution

Answer 36

a remedy that aims to restore the injured party to the position they were in before the contract

Question 37

failure to disclose

Answer 37

- failure to disclose what you know may be an misrepresentation of the fact, that the fact does not exist - need not be a fiduciary (legal) relationship, can be family --- one whom trust and confidence is placed) - if a party makes an assertion and later learns something new, they must assert that

Question 38

fraudulent misrepresentation

Answer 38

did the maker.. know or believe? not have confidence of truth? knew she had no basis to say? if answers are no, move to material

Question 39

misrepresentation

Answer 39

- there must be an assertion - the assertion must be fraud or material - the assertion must unduce the recipient to make the contract (reliance) - the reliance must be justified

Question 40

when are opinions treated as facts 4 FATE

Answer 40

opinions are not typically actionable at law - however, opinions on fiduciary - superior knowledge (special skill, judgment, expert) - there has been some trick used - parties do not in general deal at "arms length"

Question 41

when is there a duty to disclose SHAL FF 6

Answer 41

1. fiduciary 2. half-truths/misleading statements 3. active concealment 4. latent defects in transactions 5. correcting prior statements 6. statutory or legal disclosure duties

Question 42

undue influence

Answer 42

1. the stronger party uses 2. unfair persuasion on the weaker party 3. to gain that party's assent and 4. unfair benefit

Question 43

- Courts consider the relationship of the parties. - Was there an imbalance between the parties? - Could the weker party get independent advice? -Is there high pressure? - How susceptible is the weaker party? Was there reflection time?

Answer 43

undue influence

Question 44

unconscionable

Answer 44

an unfair or oppressive contract

Question 45

procedural unconscionable

Answer 45

looks to how the contract was formed

Question 46

Unequal bargaining power Deceptive practices Fine print or complex language High-pressure sales tactics

Answer 46

procedural unconscionable

Question 47

substantive unconscionable

Answer 47

focuses on the actual terms of the contract

Question 48

- Unreasonably harsh on one-sided - Grossly unfair - Against public policy - Is there a large disparity between the prevailing market price and the contract price?

Answer 48

substantive unconscionable

Question 49

duress

Answer 49

Wrongful act or threat (threats include economic harm) That compels or unfairly coerces the other party to enter into a contract against their will That they would not have entered into otherwise

Question 50

Was there any reasonable alternative

Answer 50

duress