avoiding enforcement, defenses and capacity

Question 1

valid contracts

Answer 1

contracts that are properly formed

Question 2

void contracts

Answer 2

never valid or enforceable or contracts that are missing an essential element

Question 3

unenforceable contracts

Answer 3

contracts that cannot be enforced by the parties or courts but are not necessarily illegal. may be legal but have a defect

Question 4

voidable contracts

Answer 4

contracts that may be void or valid depending on the circumstances

Question 5

enforceability defenses

Answer 5

1. at the time of formation. SOF (form of agreement), problem with competency of the parties, problem with the bargaining process in making the agreement, problem with the substance of the resulting agreement

Question 6

enforceability defenses

Answer 6

2. during the course of performance.

Question 7

enforceability at time of formation

Answer 7

sof, capacity, duress, unconscionability, undue influence, M,M, F, ND

Question 8

during the time of performance

Answer 8

impossibility, impracticability, acts of God

Question 9

formal

Answer 9

as to the formal of the contract. SOF

Question 10

procedural defects

Answer 10

capacity, duress, unconscionability, undue influence

Question 11

substantive defects

Answer 11

unconscionabiliity

Question 12

capacity as a process issue

Answer 12

classic contract law assumes that the actors are capable of doing on their own behalf except for age or mental disability

Question 13

capacity to contract

Answer 13

if lack capacity to manifest intent to enter into a contract then the contract is either void or voidable

Question 14

infants/minors

Answer 14

voidable, infants below age of majority. contracts with very young children are void. Exceptions are entertainment employment (requires court approval), promises of infant parents to support infant children

Question 15

infant contracts

Answer 15

power to form contract that will be enforceable against other party. may be avoided by the option of the infant by the infant. the infant is in a favored position in public policy.

Question 16

how to avoid a contract

Answer 16

contract may be avoided or voided at time of formation by guardian. infants may dissaffirm up to age of majority (rescission of contract). disaffirmance is the act or declaration of infant of his unequivocal intent to repudiate the agreement. Upon age of majority may still be voided within a reasonable time thereafter.

Question 17

infant reaches age of majority and fails to disaffirm within a reasonable time

Answer 17

ratification by default

Question 18

if infant dissafrims

Answer 18

title reverts to party from whom it was obtained, as in rescission

Question 19

if infant disaffirms and has good

Answer 19

must make restitution and return the good

Question 20

what if infant misrepresented age?

Answer 20

He is not precluded from disaffirming a contract

Question 21

traditional rule-infancy doctrine

Answer 21

when the contract is prejudicial against the infant it is void. when contract is to his benefit it is valid. when contract is uncertain the infant has voidable option. Upon disaffirmance, the good is returned for full purchase price regardless of condition of good

Question 22

minority rule-benefit rule

Answer 22

upon rescission, recovery of the full purchase price is subject to deduction for the minors use of the merchandise or the good

Question 23

minority rule-oregon rule

Answer 23

minors recover of the purchase price is subject to a reasonable deduction for the minor’s “use” of the consideration received or for the “depreciation” or “deterioration” of the consideration of his possession

Question 24

minority rule-dodson

Answer 24

minor should not be permitted to revere the actual paid amount without allowance for use depreciation, willful or negligent damage to good while in minor’s possession

Question 25

necessities

Answer 25

if an infant received necessities (food, clothing, shelter, schooling, medicine) he can be liable for restitution of the reasonable value of such.

Question 26

mental incapacity

Answer 26

mental incapacities which partially impair a person’s thought process may lead to a voidable contract

Question 27

total conservatorships

Answer 27

in some jurisdictions, these persons are totally impaired and do not have capacity to enter into contracts, contracts are always void

Question 28

void v voidable

Answer 28

by voidable, the other party has some protections granted as well and people will be willing to enter into a contract

Question 29

total incapacity classic view

Answer 29

any person who has been adjudicated to have a mental defect which requires a legal guardianship lacks total capacity to enter into contracts and any attempted contract with such a person is void

Question 30

total incapacity modern view

Answer 30

these contracts are voidable

Question 31

partial incapacity

Answer 31

any person whose incapacity is partial may enter into a contract which will be voidable at the option of the impaired person

Question 32

mental condition impairment traditional test/cognitive test

Answer 32

the inability to understand the nature and consequences. voidable without regard to whether the counter-party knew or had reason to know of impairment. total lack of understanding test. automatically voidable.
proof of cognitive impairment is enough

Question 33

modern test-volitional or affective test

Answer 33

inability to demonstrate motivation. or ability to act reasonably and the counterparty knew or had reason to know of the impairment. act in a reasonable manner test. voidable only of the other contracting party had reason to know of the incapacity.
requires medical testimony, lay evidence not enough.
necessary to show other party had reason to know of the condition

Question 34

when is mental incapacity judged

Answer 34

at the time of the disputed transaction. person seeking to void has the burden of proof.

Question 35

remedies for executory contract

Answer 35

remedy is rescission, avoidance

Question 36

remedies for partially performed

Answer 36

court may reform the contract or limit counter=party restitution based on the value of the benefit conferred

Question 37

fully performed remedies

Answer 37

court may prevent voiding if no one took advantage of the party lacking capacity

Question 38

persons under influence of drugs or alcohol

Answer 38

protection reasonable expectations, mental impairments. contract is voidable if the person had reason to know of the intoxication of the other party who lacked the ability to understand the transaction or act in a reasonable manner.

Question 39

voluntary incapacity

Answer 39

persons who drink/drugs voluntarily to the point that they lose their cognitive ability or motivational control will be permitted to VOID their contracts only if” other party knew or had reason to know of the degree of impairment, little sympathy by courts, you must dissafirm.

Question 40

involuntary incapacity

Answer 40

persons who are on medication or who are involuntarily drugged or intoxicated are treated the same ways as persons with mental incapacities.