Affrmative Defenses Flashcards
Affirmative Defenses
We’re P can establish elements of a contract, D can plead that it should still not be enforced through defenses such as:
- Incapacity
- Duress or misrepresentation doctrines
- Unconscionability
- Public policy doctrine
Statute of Frauds
Certain types of contracts need to be in writing and signature to be enforceable. These are:
- Call for an ex executor administrator of an estate to answer for debts of descendent (executorship)
- One person to answer for duties to another (surety ship)
- Marriage provides consideration.
- Sales of interest in land.
- Not to be performed within one year of their making.
- UCC ads for the sale of goods that exceed $500 in value UC 2-201 and the leases of goods were total payments exceeded $1000 “Merchant’s Exception”
Rest. 2nd, 110
Uniform Commercial Code
Sets for rules, governing contracts only for the sale of goods (goods = moveable).
- UCC drafted to be a model statute for state legislators to develop and enact the state’s contract (all legislatures except for Louisiana have enacted almost all of article 2 as law)
- interstate commerce allows all the states to abide by this code
Is the oral agreement for P to continue its construction work for real estate company D unenforceable under the Statute of Frauds when it’s the timeframe for performance isn’t expressly stated?
No, it’s enforceable. One year provision of the statute of frauds, requires a contract where performance is not completed within one year to be in writing in order to be enforceable.
- A contract with no timeframe for performance could be completed within one year agreement —> does not fall within one year provision of Connecticut statute of frauds, even if it is the intention of performance to extend beyond one year —> enforceable
C.R. Klewin, Inc. v. Flagship Properties Inc (1991)
Do P’s purchase orders containing quantities prices, and descriptions of the textiles to D fall within “merchants exception” of the statute of frauds, indicating they’re sufficient to form a contract?
Yes, D provided confirmation that it had received P’s purchase orders but offered no objection, satisfying merchants exception (not requiring signature), and making this a valid contract
- a purchase order alone fails that test, but P’s purchase orders with the handwritten notations of terms (quantities, descriptions, prices per unit, payment terms) reflect the terms sufficient to form contract
Merchant’s exception =
1. Between merchants
2. A reasonable time
3. A record and confirmation of the contract
4. Sufficient against the sender is received
5. The party receiving it has reason to know its contents
6. For sake of goods more than $500, need record and signatures
7. No notice of objection given within 10 days after it’s received
Bazak International Corp. v. Mast Industries (1989)
Does the statute of frauds “Sale of interest in Land” apply to P’s settlement of transfer of interest in property back to herself from D via P’s lawyer’s electronic signature?
Yes, this falls within statute of frauds because written emails are signed and contain names in both emails and together have the subject in terms.
- Rest 2nd 132, Several Writings = memo may consist of several writings of one of the writings assigned, and the writings in the circumstances indicate they relate to the same transaction
- Rest 2nd 131, General Requisite of Memorandum = contract with statute of frauds is evidenced by any writing and signed
Waddle v. Elrod (2012)
Is the contract made by D and subcontractor P voidable for duress given that P threatened to stop work on the contract unless D agreed to the terms?
Yes, D was deprived of its free will as P’s amendment to the contract (breach) threatened D’s ability for P to contract with the government —> D had to agree to the price increases based on economic distress —> sufficient to void D’s agreement to pay the price increases
- a contract made by improper threat and in bad faith is voidable (Rest 2nd 176)
- Taking advantage of vulnerability that could have been anticipated at formation?
Austin Instrument, Inc. v Loral Corp (1971)
Rest 2nd, 89: modification of executory contract
Rest 2nd, 175: When Duress Makes a Contract Voidable
89: A promise modifying a duty under a contract, not fully performed on either side is binding:
- a) if the modification is fair and equitable in view of circumstances, not anticipated by the parties when the contract was made
- b) to the extent provided by the statute
- c) to the extent that justice requires enforcement in view of material change of position and reliance on that promise
175: is a party’s manifestation of assent is induced by an improper threat by the other party that leaves the victim no reasonable alternative, the contract is avoidable by the victim.
Can D use duress as a shield not to pay attorney King $500 for his representation against the sheriff who was going to prosecute D for slander?
No D’s internal fear of the attorney does not justify duress because it’s entirely subjective.
Two sources of duress:
- Rest 2nd, 174: when duress by physical compulsion prevents formation of a contract—no physical harm met here
- Rest 2nd, 175: by threat— can only be made in bad faith, but the court says the attorney’s threat of civil action was made in good faith (so would not count as a threat)
King et al. v. Lewis (1939)
Is there consideration for a contract where the P libellants verbally demanded wage adjustment after already starting the job, threatening not to perform the job it disagreed upon, and performance was the same as the old contract?
No, there is no consideration for the exact same services and renegotiation after threatened breach.
- negotiating power in Alaska is stronger versus San Francisco because no one else can replace the fisherman in Alaska.
- It’s bad faith to take advantage of the employer and renegotiation under duress is void (Rest. 2nd 175)
- good faith v. bad faith relies on an unexpected occurrence (if foreseeable, getting out is bad faith)— fisherman could’ve done the research on payment and nets
- enforcing a promise not to breach an existing contract might discourage contract-specific investment because it creates the possibility of post-contractual holdup
Alaska Packers Ass’N v. Domenico (1902)
Does the sellers failure to inform the buyer that the reputation of the house is haunted, a reputation that he created himself, necessitate the seller to reveal information about the house if there exists a fiduciary relationship between parties and if so, does this provide grounds for rescission of the contract?
Yes, assertion was not in accordance with the facts. the seller created a condition that impairs the value of a contract, and it is within knowledge of the seller and unlikely to be discovered by prudent purchaser, exercising duty care nondisclosure -> rescission. He had a duty to disclose.
- Doctrine of caveat emptor = “buyer beware”, requires buyer to prudently, assess fitness value of purchase with no duty by vendor to disclose information concerning premises ??
Stambovsky v. Ackley (1991)
Does the dance studios failure to tell P of her terrible dance skills and inducing her to pay a total of $31,090.45 for 2302 hours of dance class over 16 months constitute misrepresentation under superior knowledge where she is entitled to recovery?
Probably, misrepresentations are actionable when they relate to material representations of fact where a party is superior knowledge of the truth or false of the statement. A statement of opinion will be treated as a statement of fact
Rest 2, 169: when reliance on an assertion of opinion is not justified =
- stands in such a relation of trust and confidence of the person whose opinion is asserted that the recipient is reasonably relying on it
- Reasonably believes that as compared with himself, the person whose opinion is asserted has special skilled judgment or objectivity with respect to the subject matter, or
- Or is for some other special reason, particularly susceptible to a misrepresentation of the type involved
Rest 2nd 162 When a Misrepresentation is Fraudulent or Material
(1) Fraudulent if the maker intends his assertion to induce a party to manifest his assent and the maker
(a) knows or believes that his assertion is not in a accord with the facts
(2) material if it would be likely to induce a reasonable person to manifest his assent or if the maker knows that it would be likely to induce the recipient to do so
Vokes v. Arthur Murray, Inc. (1968)
Unconscionability
An absence of meaningful choice on the part of one of the parties together with contract terms that are unreasonably favorable to the other other party
Rest. 2nd, 208, UCC 2-304: require one or more of below to invoke:
-procedure unconscionability = how you get there—sly salesman, tiny written terms
-substantive Unconscionability = taking advantage of the person (uneven bargaining, not mutually wealth enhancing)
Public policy
Rest 2nd 178, 179: will refuse to enforce an otherwise valid contract if the agreement contravenes public policy
- Statutory resignations of state or case law (constitute social welfare)
- judges need to be careful and invoking public policy and not be biased towards personal preferences
- Judges need to analyze statutes and traditional pronouncements in common law cases
- legislature has prohibited behavior public policy void kicks in (I.e., contracts for murder or prosecution)
- difficult when contract subject matter does not fall squarely into a prohibited category, but can be an analogy to a prohibited conduct, either paternalistically or concerning negative externalities (negative effects of conduct on specific third parties or society generally)
Is D’s cancellation of the baby show in the week of an infantile paralysis disease justified under public policy?
Yes, if a contract is a public policy, it is void as the holding of a baby show during this time
Hanford et al. v. CT Fair Ass’n, Inc. (1918)
