Defenses to Enforceability Flashcards
(9 cards)
Incapacity to Contract
Incapacity to Contract
A contract generally cannot be enforced at law against a party who lacked capacity at the time of execution, which include minors, insane persons, and intoxicated persons.
Duress and Undue Influence
Duress and Undue Influence
Duress is the coercive force used to compel another to contract against his will or judgment, based on either physical or economic duress. Undue influence occurs when there is undue susceptibility to pressure by one party, and excessive pressure by the other party.
Mistake and Misunderstanding
Mistake and Misunderstanding
A mistake is a belief that is not in accord with the facts. There are two types of mistake: bilateral and unilateral. A mistake by both parties can mean there was no true mutual assent and thus, no contract. A unilateral mistake is a mistake made by one party that is unknown to the other party and is generally not a valid defense to formation of a contract. In the case of misunderstanding, there will be no contract if the parties use a material term open to at least two interpretations, each party attaches different meaning to the term, and neither party knows the term is open to two interpretations.
Fraud, Misrepresentation, and Nondisclosure
Fraud
Where a party is induced to enter a contract based upon fraud or misrepresentation, the contract may be voidable in whole or in part. A misrpresentation is a statement made by either party to a contract at the time of contracting that is not true. To prove a case of fraud, the party must prove that a misrepresentation of a material fact was intentionally made.
Fraud, Misrepresentation, and Nondisclosure
Nondisclosure
Illegality, Unconscionability, and Public Policy
Illegality
A contract is void if it has an illegal subject matter, is performed by illegal means, or is against public policy. Be that as it may, a contract with an illegal purpose is voidable by a party who didn’t know of the illegal purpose.
Illegality, Unconscionability, and Public Policy
Unconscionability
A unconscionable contract is one which is so grossly unreasonable or unconscionable in the light of the mores and business practices of the time and place as to be unenforceable according to its literal terms. Procedural unconscionability exists where there are defects in the bargaining process and substantive unconscionability where the terms of the contract are grossly one-sided.
Illegality, Unconscionability, and Public Policy
Public Policy
A contract is void as against public policy if it has a tendency to be injurious to the public or against the public good (such as unreasonably restraining trade). Whether a restrictive covenant, including a covenant not to compete, is unreasonable requires a balance of interests.
Statute of Frauds
Statute of Frauds
A contract within the Statute of Frauds satisfies the statute and is enforceable if it is evidenced by a writing signed by the party to be charged, which reasonably identifies the subject matter of the contract, is sufficient to indicate that a contract has been made, and states with reasonable certainty the essential terms of the contract.
