Avoidance of Contract Flashcards

1
Q

Misunderstanding Doctrine:

A

If both parties attach different meaning to the word or provision and the provision or word can have either meaning, both meanings are reasonable, there is no manifestation of assent.

If the word is vague, then there is no reasonably certain terms.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Mutual Mistake Elements

A

An adversely affected party can void a contract under mutual mistake if:

  1. Both parties make a mistake a formation of the contract
  2. Mistake was about a basic assumption which the contract was made
  3. Mistake was a material effect
  4. Adversely affected party did not bar the risk
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

How can a person bear the risk?

A
  1. if the risk is allocated ot the party by the agreement
  2. There is conscious ignorance (Party knows of limited knowledge but still think it is sufficient)
  3. Risk is allocated to the party by the court
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Unilateral Mistake Elements:

A

Adversely effected party can void the contract if:

  1. Adversely affected party makes the mistake at the formation of the contract.
  2. Mistake was about a basic assumption on which the contract was made
  3. Mistake was a material effect
  4. Adversely affected party did not bear the risk of mistake
  5. mistake is such that enforcement of the contract would be unconscionable or the other party had reason to know of the mistake or his or her fault caused the mistake
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Reformation Remedy:

A

If there is srtrong, clear and convincing evidence there was a typographical error, the court will allow the contract to be reformed to reflect the parties’ agreement.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Misrepresentation elements:

A

Recipient of a misrepresentation can void the contract if:

  1. There was a misrepresentation
  2. the misrepresentation was fraudulent or material
  3. misrepresentation induces the party’s assent to the contract
  4. recipient is justified in relying on the representation
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What are the factors that justify a person’s reliance on misrepresentation?

A
  1. Stands in such a relation of trust and confidence to the person whose opinion is asserted
  2. reasonably believes the person whose opinion is asserted has special skill, judgment or objectivity with respect to the subject matter
  3. is particularly susceptible to a misrepresentation of the type involved
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Misrepresentation elements:

A

Recipient of a misrepresentation can void the contract if:

  1. There was a misrepresentation
  2. the misrepresentation was fraudulent or material
  3. misrepresentation induces the party’s assent to the contract
  4. recipient is justified in relying on the representation
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Duress

A

victim can void a contract if:

  1. other party makes an improper threat
  2. threat induces the victim to manifest assent to the contract
  3. threat left the victim with no reasonable alternative
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Undue Influence

A

victim can void a contract if:

  1. other party exerted unfair persuasion
  2. victim was either under the domination of the party or by virtue of the relation between them was justified in assuming that the person will not act in a manner inconsistent
  3. manifestation of assent was induced by the unfair persuasion
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is an improper threat?

A
  1. A threat to commit a crime or tort

2. Threat to breach a contract

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Agreements against public policy:

A

An agreement is void on grounds of public policy if:

  1. legislation provides that it is void or unenforceable
  2. interest in the agreement’s enforcement is clearly outweighed in the circumstances by a public policy

An agreement in restraint of trade (including a non-competition agreement) is void on grounds of public policy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Infancy Doctrine BLL:

A

person younger than 18 has the power to void a contract (has the capacity to enter into a voidable contract).

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Infancy Majority Rule (necessaries):

A

A minor has the power to disaffirm a contract for necessaries, minor will be liable in quasi-contract (a claim for unjust enrichment seeking restitution) for the reasonable value of the necessaries.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Infancy Majority rule (not necessaries):

A

only responsible for returning whatever property he or she received from the adult or services and not responsible for paying back.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Infancy Minority Rule (not necessaries):

A

The minor is responsible for paying for the reasonable value of the use of the property or the services and for the property’s depreciation or loss in value.

17
Q

Mental Infirmity BLL:

A

person has the power to void a contract when entering into the contract if:
1. person had a mental illness or defect
2. (a) because of the mental illness or defect he or she was unable to understand in a reasonable manner the nature and consequence of the transaction, or (b) he or she was unable to act in a reasonable manner in relation to the transaction and the other party had reason to know of the person’s condition
Any resulting agreement is void.

18
Q

Unconscionability BLL:

A

Requires both procedural and substantive unconscionability.

If a contract or term is unconscionable at time the contract was made, the court may:

  1. refuse to enforce the contract
  2. enforce contract without the unconscionable term
  3. limit the application of the unconscionable term to avoid an unconscionable result
19
Q

What is procedural unconscionability?

A

Improprieties in contract formation leading to “unfair surprise” or an “absence of meaningful choice

20
Q

What is substantive unconscionability?

A

terms that are oppressive, unduly harsh, commercially unreasonable, or grossly unfair

21
Q

Intoxication BLL:

A

person has the power to void a contract when entering into a contract:

  1. he was intoxicated
  2. other party had reason to know he was intoxicated
  3. result of the intoxication he was unable to understand in a reasonable manner the nature and consequences of the transaction or (b) he was unable to act in a reasonable manner in relation to the transaction.
22
Q

Ratification of a Voidable contract BLL:

A

party who has the power to void a contract loses that power by ratifying. Can ratify expressly or implied.

23
Q

What is implied ratification?

A
  1. some unequivocal act giving rise to a reasonable inference that the party intended to ratify the contract
  2. the party failing to disaffirm within a reasonable time after learning of the contract’s defect and no longer being under the disability that rendered it voidable.
24
Q

Supervening Impracticability BLL:

A

A party’s duty to perform is discharged after the contract is made if

  1. party’s performance is made impossible or impracticable 2. without his fault
  2. by the occurrence of an event the non-occurrence of which was a basic assumption on which the contract was made, and
  3. the language or the circumstances do not indicate that the parties intended liability for non-performance to remain despite the event making performance impossible or impracticable.
25
Q

What does impracticability mean?

A

can only be accomplished with extreme and unreasonable difficulty, expense, injury or loss

26
Q

Existing impracticability BLL:

A

A party’s duty never arises when the contract is made if:

  1. party’s performance is impossible or impracticable
    (2) without his fault
    (3) because of a fact of which she had no reason to know;
    (4) the existence of which was a basic assumption on which the contract was made, and
    (5) the language or the circumstances do not indicate that the parties intended liability for non-performance to arise
27
Q

Supervening Frustration of Purpose BLL:

A

A party’s duty is discharged if:

(1) party’s principal purpose
(2) is substantially frustrated
(3) without his or her fault
(4) by an event whose non-occurrence was a basic assumption on which the contract was made
(5) and the language or the circumstances do not indicate that the parties intended to have a duty to perform despite the occurrence of the event.

28
Q

Existing Frustration of Purpose BLL:

A

A party’s contract duty is discharged if:

(1) party’s principal purpose
(2) is substantially frustrated
(3) without his or her fault
(4) by a fact of which she had no reason to know
(5) and the non-existence of which was a basic assumption on which the contract was made
(6) and the language or the circumstances do not indicate that the parties intended to have a duty to perform despite the occurrence of the event

29
Q

Express warranty BLL:

A

(1) an affirmation of fact
(2) that relates to the goods or services
(3) and that is part of the basis of the bargain.