Defenses to Enforceability

Question 1

Mutual Mistake

Answer 1

A contract is voidable when there is a mutual mistake.
Mutual mistake occurs when
1) both parties are mistaken as to a basic assumption on which the K is made,
2) mistake is material, and
3) party asserting mistake did not bear risk of the mistake

Question 2

Unilateral Mistake

Answer 2

Generally not a valid defense to enforceability, unless one party knew or had reason to know of mistake or mistake makes contract unconscionable.

1) mistake made by one party
2) unknown to the other party
3) concerning a basic assumption
4) has a material effect

Mistake involving price/value is not considered material.

Question 3

Statute of Frauds

Answer 3

The following contracts are not valid unless they are in writing:

1) marriage contracts
2) suretyship contracts (guaranting the payment of another’s debt)
3) contracts that cannot be fully performed in under a year
4) contracts for the sale of property or creating an interest in the land
5) contracts for the sale of goods worth more than $500, and
6) contracts where executor will pay for estate debts from personal funds

To satisfy SOF, the contract must

1) be in writing by the party to be charged
2) identify and describe subject matter
3) indicate a contract has been made and
4) state all essential terms

Question 4

Common Law Exceptions to Statute of Frauds

Answer 4

A contract that violates the SOF may still be enforceable where there is

1) full performance (partial performance ok in land sale contracts if party made payment for land, took possession, or made valuable improvements) OR
2) judicial acknowledgment, (party admits to agreement in pleadings/testimony), OR
3) estoppel (reasonable/foreseeable detirmental reliance on a promise)

Question 5

UCC Exceptions to Statute of Frauds

Answer 5

Four exceptions to SOF under UCC:

1) merchant’s conirmatory memorandum
- writing that confirms agreement b/w 2 merchants is sufficient if it’s signed and other party didn’t object
2) goods accepted/paid for
- seller can enforce K price of goods buyer accepted/paid for but not total K price if only portion of total quantity was accepted
3) custom made goods
- seller can enforce K for custom goods seller substantially started & aren’t suitable for sale in ordinary course of business
4) admission during judicial proceedings
- party to be charged admits there was a K

Question 6

Nondisclosure

Answer 6

Failure to disclose a material fact of the contract that forms the basis of the contract and the other party has no reason to know of the disclosure