Avoidance

Question 1

Avoidance

Answer 1

A contract that would otherwise be enforceable may be rendered unenforceable due to some defect in the process interfering with mutual manifestation of assent.

Question 2

Void and Voidable

Answer 2

A contract is void if no one can enforce it because it does not exist
A contract is voidable if one party can choose to enforce it or escape it

Question 3

Misunderstanding

Answer 3

The two parties apply different meaning to the same term or provision in a contract. Where neither had knowledge the provision had a different meaning, the contract is void.

Question 4

Misunderstanding: Knew or should have known

Answer 4

When a party knew or should have known what was meant, the contract is voidable by the party that did not have knowledge, though a valid contract may still exist

Question 5

Mistake: two types

Answer 5

Mutual and Unilateral

Question 6

Mutual Mistake

Answer 6

Exist where 1) both parties are mistaken on an 2) assumption basic to the contract which 3) has a material effect on performance. Renders contract voidable unless one party assumed the risk

Question 7

Assumption of Risk

Answer 7

Party assumes the risk when they
1) contractually assume it 2) knowingly have insufficient knowledge yet treat it as enough or 3) it is reasonable under the circumstances to do so.

Question 8

Unilateral Mistake

Answer 8

Only one party made a mistake. Generally, contract will be enforced unless mistake was basic to the contract and party knew and took advantage of mistake

Question 9

A misrepresentation is fraudulent when

Answer 9

It induces assent and maker
1. Knows or believes assertion not in accord with facts
2. Does not have confidence that is stated
3. Knows that does not have basis that he states or implies

Question 10

A misrepresentation is material where

Answer 10

It would induce a reasonable person to manifest assent

Question 11

An opinion is generally not a basis for fraud, unless

Answer 11

Asserted by one who has superior knowledge and plaintiff had no reason to know better

Question 12

Reliance on a fraudulent statement must be . . .

Answer 12

Reasonable. If one of plaintiff’s knowledge and intelligence should have known they were being deceived, they cannot recover.

Question 13

Elements of innocent misrepresentation

Answer 13

1. Reliance
2. Were statements material
3. Was reliance justified

Question 14

Material fact

Answer 14

One in which a reasonable person would attach importance to when making their decision

Question 15

Non-disclosure is equivalent to an assertion where

Answer 15

1. It could correct a previous assertion
2. Correct a mistake
3. When it should be told

Question 16

Duress: Two types

Answer 16

Physical compulsion (gun to head, puppetteering) renders contract void.
Improper threat: voidable

Question 17

Improper threat: elements

Answer 17

1. What is threatened is a crime or a tort
2. What is threatened is a criminal prosecution
3. Civil process used improperly/ bad faith
4. Breach of good faith and fair dealing

Question 18

Where there is an improper threat, the contract will only be voidable if there was no [ ] [ ] then to sign the contract

Answer 18

Reasonable alternative

Question 19

Economic Duress

Answer 19

Defendant, by wrongful acts or threats, intentionally caused an involuntary entry into contract. No choice or face financial ruin.

Question 20

Undue Influence

Answer 20

Coercive pressure placed on one susceptible to it. Weakness of mind concurrent with gross inadequacy of consideration or circumstances of suspicion.

Question 21

Persuasion that tends to be coercive. Overcomes the will without convincing the judgement

Answer 21

Undue influence

Question 22

Factors for undue influence

Answer 22

1. Time of discussion
2. Lack of sleep
3. Unusual place
4. Demand of haste
5. Emphasis on consequences of delay
6. Multiple persuaders
7. Absence of third party advisors

Question 23

Illegality

Answer 23

Contract need not be actually illegal, but can be. Can be something unenforceable on public policy grounds.

Question 24

If a provider does not have a required license, such contract will be unenforceable if

Answer 24

License is required for a public policy reason

Question 25

Noncompetes will not be enforceable unless

Answer 25

There can be a demonstrated need (special skill, knowledge) and they are sufficiently limited in time and geographic area.

Question 26

Courts may [ ] a noncompete agreement

Answer 26

Reform

Question 27

Incapacity

Answer 27

A contract made by one without legal capacity is voidable

Question 28

Those without capacity to contract

Answer 28

1. Legal guardianship
2. Minor
3. Mental deficiency
4. Intoxicated

Question 29

Benefit rule

Answer 29

A minority view in which a minor disaffirming a contract may be liable for benefits received