Defenses Flashcards
Explain Marriage - Statute of Frauds
Defenses
Memorize
Certain contracts, including those to induce marriage by offering something of value, must be evidenced in writing to be enforceable.
Exception
This does not include a return promise to marry.
Explain Year - Statute of Frauds
Defenses
Memorize
Certain contracts, such as those that cannot be performed within one year, must be evidenced in writing to be enforceable.
Remember
1. Timing runs from the time of formation until the end of performance.
- Applies even though the contract has already lasted longer than one year.
- . Cancellation clauses will not take a contract out of the statute of frauds as cancellation clauses produce excusable non-performance and excusable non-performance does not equal performance (for example, an employment contract lasting 3 years but that can be canceled with 10 days notice).
Exception
The contract can be taken out of the statute of frauds if there is any possibility that performance will be completed within one year.
Explain Land - Statute of Frauds
Defenses
Memorize
Certain contracts, including those for the sale of land, must be evidenced in writing to be enforceable.
Memorize
Under the “equal dignity rule”, a principle-agent agreement giving agent authority to execute a contract for an interest in land is enforceable if it is in writing and signed by the principle. Failure to comply will relieve the principle of liability.
Exception Can be taken out of the SOF is any TWO of the following apply: 1. Make payment 2. Move on the land 3. Make improvements
Explain Executor’s Promise - Statute of Frauds
Defenses
Memorize
Certain contracts, including those made by an executor to personally pay for the debt of an estate, must be evidenced in writing to be enforceable.
Explain Goods - Statute of Frauds
Defenses
Memorize
Certain contracts, including those for the sale of goods of $500 or more, must be evidenced in writing to be enforceable.
Exceptions
Goods can be taken out fo the Statute of Frauds if:
- They are specially manufactured goods not suitable for sale to others.
- There is part or full performance or acceptance of payment.
- Admission under oath or pleading.
Explain Surety - Statute Of Frauds
Defenses
Memorize
Certain contracts, including those by one who guarantees the payment of a debt of another, must be evidenced in writing to be enforceable.
Remember
The promise must be collateral and not primary.
Exception
Under the main purpose doctrine, a promise can be taken out of the statute of frauds if the main purpose of the promise was to financially benefit the promisor, rather than the debtor.
How can the SOF be satisfied?
Defenses
Remember
The Statute of Frauds can be satisfied by a writing that evidences the existence of a contract signed by the party to be charged.
Exception
Merchant’s Confirmatory Memorandum
What is a Merchant’s Confirmatory Memorandum?
Statute of Frauds - Defenses
Remember
Exception to signature requirement by party to be charged.
Remember
Under the UCC, as between merchants, if within a reasonable time a writing in confirmation of the contract sufficient against the sender is received and the party receiving it has reason to know of its contents, it satisfies the requirements against such party unless written notice of objection to its contents is given within 10 days.
What does MYLEGS stand for?
Statute of Frauds - Defenses
Remember
Marriage (Inducement)
Year (Cannot be performed within one year)
Land (Sale of land)
Executor’s Promise (to pay for debt of estate)
Goods ($500 or more)
Surety (guarantees payment of another)
What does SI IM DUUM stand for?
Defenses
Remember Statute of Frauds Illegality Incapacity Mistake Duress Undue Influence Unconscionability Misrepresentation/Fraud
Explain Contracts with Minors - Incapacity
Defenses
Memorize
Contracts with minors are voidable at the option of the minor.
Remember
1. A contract may be disaffirmed by a minor at any time before reaching the age of majority. After reaching the age of majority, if the contract is not disaffirmed within a reasonable time – usually 30 days – then the contract is no longer voidable.
- If the contract is affirmed after reaching the age of majority, whether expressly or impliedly, the contract is no longer voidable.
- An implied affrtimation can also be making a single payment on a car (for example) after reaching the age of 18.
- Contracts with minors for the providing of necessities, not provided by someone else, are voidable. However, reasonable value of the necessities may be recovered.
- Necessities are food, clothing, and shelter. In (some) cases transportation (car), education expenses, and medical expenses.
- Contracts with minors are voidable even if consideration cannot be returned or was damaged by the minor.
Explain Contracts with Mental Deficiency People - Incapacity
Defenses
Memorize
Contracts with people who have a mental capacity so deficient that the person 1) does not understand the nature and consequences of the contract, or 2) is unable to act in a reasonable manner in relation to the contract, and the other party had reason to know of the mental deficiency, are voidable at the option of the mentally deficient person.
Remember
Mentally deficient people are liable for the reasonable value of necessities to the same extent as a minor.
Exception
However, if the mentally deficient person has a lucid moment and they affirm the contract, then the contract is enforceable.
Explain Contracts with Intoxicated People - Incapacity
Defenses
Memorize
Contracts with people who are so intoxicated as to 1) not understand the nature and consequences of a contract, or 2) are unable to act in a reasonable manger in relation to the contract, and the other party had reason to know of the intoxication, are voidable at the option of the intoxicated person.
Remember
Alcohol or drugs - both legal and illegal.
Intoxicated people are liable for the reasonable value of necessities to the same extent as a minor.
Exception
However, if the person recovers and affirms the contract, then the contract is enforceable.
What contracts are Illegal?
Illegality - Defenses
Memorize
Contracts that violate the constitution, law, or public policy are illegal and void.
Memorize
Where the subject matter is legal but the use or purpose is illegal, and one party is unaware of the illegal activity, the contract is voidable at the option of the innocent party.
Remember
1. This generally includes an agreement to commit a crime, gambling bets, loan sharking, and bribery of a public official or private business.
- Where the illegality relates to restriction on employment and trade, such as non-competition clauses, the courts may rewrite or “blue pencil” the clause to be
reasonable. - Non-compete clauses must be reasonable in time and geographic scope.
What is Supervening Illegality?
Illegality - Defenses
Memorize
If at the time the contract is formed the subject and purpose is legal, but then subsequently becomes illegal, obligation of the parties is discharged.
Remember
Relief may be sought in quasi-contract or restitution.
What is Licensing Illegality?
Illegality - Defenses
Memorize
If the purpose of a license is to protect the welfare of the public by ensuring minimum competency, then the contract is void.
If the purpose is to generate revenue then the contract is enforceable.
What is In Pari Delicto | “In Equal Fault” within Illegality?
Defenses
Memorize
When both parties are equally culpable, the court will genially not grant any relief.
Remember
Equitable claims for relief can be dismissed under the “clean hands” defense.
Exception
The less culpable party may recover in restitution and exceptional cases may alleviate the harshness of no relief.
What is Misrepresentation?
Defenses
Memorize
When misrepresentation of a material fact causes reasonable and actual reliance by plaintiff the contract may be void or voidable.
Remember
Mere puffing does not rise to the level of misrepresentation.
Remember
The general rule is that the seller has no duty to disclose, nor liability for non-disclosure, of material facts except where:
- Half-truths are made
- There was a genuine belief that the statement was true when made, but now, before reliance, the seller knows it is false.
- The statement was, in fact, true when made but now, before reliance, it is false.
- Where conduct rises to the level of active concealment.
What reliance is needed under Innocent Misrepresentation?
Defenses
Memorize
Innocent misrepresentation requires reasonable and actual reliance.
What reliance is needed under Negligent Misrepresentation?
Defenses
Memorize
Negligent misrepresentation requires reasonable and actual reliance.
Explain Intentional Misrepresentation - Fraud?
Defenses
Memorize Fraud (intentional misrepresentation) requires scienter, knowledge that the statement was false or reckless disregard as to its truth or falsity.
Fraud requires only actual reliance.
Where there is fraud in the inducement the contract is voidable at the option of the deceived party.
Where there is fraud in the factum (facts), the contract is void.
What is Duress (Physical)?
Defenses
Memorize
When a party enters into a contract or modifies an existing contract solely based on physical force or threats of physical force, the contract is void.
What is Economic Duress?
Defenses
Memorize
When a party enters into a contract or modifies an existing contract solely based on wrongful threats, the contract is voidable at the option of the victim.
Remember
The threat of a future crime or tort, threat of criminal prosecution, bad faith use of civil process, and threat of wrongful breach of an existing contract.
What is Procedural and Substantive Unconscionability?
Defenses
Memorize
When a contract or clause lacks any meaningful choice (Procedural Unconscionability) and when the terms unreasonably favor one party (Substantive Unconscionability) the majority rule is that the contract is unconscionable.
Remember:
Both Procedural and Substantive unconscionability are required to prove unconscionability.
Are Adhesion Contracts unconscionable? Why?
Defenses
Memorize
Adhesion contracts, such as standard form contracts with a take-it-or-leave-it proposition offering no real opportunity to scrutinize or understand the contract, are often found to be unconscionable.
Is there a Duty to Read a contract under the Common Law?
Defenses
Memorize
At common law, in the absence of fraud, one who signs a written agreement is bound by its terms whether he read and understood it or not, or whether he can read it or not.
However, modernly, courts will not enforce contracts that are difficult to read or understand because of the use of legalese, fine print or the words are unintelligible.
Are Contracts Against Public Policy unconscionable?
Defenses
Memorize
Contracts considered to be against public good or that are injurious to the public are generally unconscionable.
Remember
1. Any terms considered unconscionable must have been unconscionable at the time of formation.
- Exculpatory clauses for consequential injury to the person in the case of consumer goods are unconscionable.
What Remedies are available under unconscionability?
Defenses
Memorize
The courts may:
1. Refuse enforcement of the entire contract
2. Eliminate offending terms but enforce the rest (blue pencil).
3. Limit the application of any unconscionable terms.
What is Undue Influence?
Defenses
Memorize
When one party unduly influences another, or asserts their will over the will of another, the contract is voidable at the option of the victim.
Remember
The wrongdoer must be:
1. In a position of trust, confidence, or superior power.
2. There must have been some type of improper persuasion against a victim who is susceptible to improper persuasion.
What is a Mutual Mistake?
Defenses
Memorize
When both parties are mistaken as to a material fact, the contract is voidable at the option of the adversely affected party.
What is a Unilateral Mistake?
Defenses
Memorize
When one party is mistaken as to a material fact, and 1) the non-mistaken party knew or should have known about the mistake, and 2) the mistake is one of computation or omission, then the contract is voidable.
Remember
A party is held responsible for mistakes by their intermediaries.
Exception
Mistakes as to judgement are no defense.
What is Ambiguity - Mistake?
Defenses
Memorize
When a term is open to various interpretations, and either the term is associated with more than one thing or no one thing, the term is said to be ambiguous.
What is Patent Ambiguity - Mistake?
Defenses
Memorize
When a term is ambiguous on its face it is open for interpretation by the court.
What Latent Ambiguity - Mistake?
Defenses
Memorize
When ambiguity becomes apparent only after further facts are presented, the ambiguity is said to be latent.
Remember
Neither/Both
Where neither or both of the parties are aware of the latent ambiguity, there will be no contract unless both parties attach the same meaning to the ambiguity.
One Party
Where one party is aware of the latent ambiguity, there is a contract and the meaning is that of the unaware party.
Term - Multiple Meanings
If the term refers to multiple meanings and 1) the recipient is only aware of one meaning, and 2) the author is aware that the recipient is only aware of one meaning, then that is the meaning that is fixed for the term.
Against the Drafter
Ambiguous terms are usually interpreted against the drafter.
What is Scrivener’s Error - Mistake?
Defenses
Memorize
A court of equity may reform a written contract when the writing, because of mistake, does not reflect the actual agreement of the parties.
Satisfaction of Statute of Frauds - Remember for Essay
Statute of Frauds - Defenses
Remember for Essay
- Always see if any contract falls within the SOF
- Then see if it can be taken OUT of the SOF.
- Then see is SOF is satisfied.
- If a contract falls within the SOF, but does not satisfy the SOF and cannot be taken out, then the contract is not void or voidable, only unenforceable.
Define Parole Evidence Rule
Memorize (Know Cold)
Prior written or oral, and contemporaneous oral expressions, that contradict, modify, or vary contractual terms are inadmissible if the written contract is intended as a complete and final expression of the parties.
Within the Stature of Frauds - Marriage - does it include a return promise to marry?
No
Within the Statute of Frauds - Year - how is timing determined?
Timing runs from the time of formation until the end of performance.
Within the Statute of Frauds - Year - does it apply even though the contract has already lasted longer than one year?
Yes
Will Cancelation Clauses take a contract (Year) out of the Statute of Frauds?
Cancellation clauses will not take a contract out of the statute of frauds as cancellation clauses produce excusable non-performance and excusable non-performance does not equal performance.
Can a contract be taken out of the Statute of Frauds (Year) if there is any possibility that performance will be completed within one year?
Yes, if there is ANY possibility that performance will be completed within one year, it can be taken out of the Statute of Frauds.
Under the Statute of Frauds - Land - the “equal dignity rule”, is a principle-agent agreement which gives an agent authority to execute a contract for an interest in land and is enforceable if it is in writing and signed by the principle. Is this correct?
Yes
What happens if the agent fails to comply under the “equal dignity rule” principle-agent agreement?
Failure to comply will relieve the principle of liability.
When can the sale of Land be taken out of the Statute of Frauds?
If any TWO of the following apply:
- Make payment
- Move on the land
- Make improvements
When can Goods be taken out fo the Statute of Frauds? Simply put, please?
- If they are specially manufactured goods not suitable for sale to others.
- If there is part or full performance or acceptance of payment.
- By admission under oath or pleading.
Under Surety, Statute of Frauds, the promise to pay for the debt of another must be collateral and not primary, correct?
Yes, the promise to pay for the debt of another must be collateral and not primary.
When can Surety be taken out of the Statute of Frauds?
Under the Main Purpose Doctrine.
What is the Main Purpose Doctrine within Surety, Statute of Frauds?
Under the main purpose doctrine, a promise can be taken out of the statute of frauds if the main purpose of the promise was to financially benefit the promisor, rather than the debtor.
What is the exception to the “signed by the party to be charged” rule in the Statute of Frauds?
A Merchant’s Confirmatory Memorandum.
What is a Merchant’s Confirmatory Memorandum? Simply put, please?
Per Ed:
If one merchants sends another merchant a confirmation in writing that is sufficient to bind the sending merchant, and it is received by the receiving merchant and the receiving merchant knows of its contents, and the receiving merchant doesn’t object within 10 days, then it binds the receiving merchant.
Are contracts with Minors voidable at the option of the minor?
Yes, contracts with Minors are voidable at the option of the minor.
When can a contract with a minor be disaffirmed by the minor?
At any time before reaching the age of majority.
After a minor reaches the age of majority, can a contract still be disaffirmed?
Yes, if the contract is disaffirmed within a reasonable time – usually 30 days – then the contract is no longer voidable.
What if a minor doesn’t disaffirm a contract within 30 days of reaching the age of majority?
The contract is no longer voidable.
