Contract Defenses

Question 1

Statute of Frauds Subjects

Answer 1

Contracts for marriage, contracts that cannot be performed within one year, land, executor promises, good for $500 or more, and surety promises (MYLEGS)

Question 2

Exemptions to the $500 Goods Requirement

Answer 2

Specially manufactured goods, written confirmatory memo, admissions in court, or part performance (SWAP)

Question 3

Statute of Frauds

Answer 3

Requires a writing, signed by the party to be charged, with the essential terms of the agreement

Question 4

Mutual Mistake

Answer 4

Both parties mistaken about basic material assumption with neither assuming the risk

Question 5

Unilateral Mistake

Answer 5

One party is mistaken about a basic material assumption and the other party either knew or should have known of the mistake

Question 6

Unconscionability

Answer 6

One-sided, a defect in the bargaining process itself, lack of a meaningful choice

Question 7

Duress/Fraud

Answer 7

Overcoming will by force or by misrepresentation

Question 8

Illegality

Answer 8

Illegal contracts are unenforceable (e.g., contracts for murder)

Question 9

Incapacity

Answer 9

Minors (under 18), mentally ill, and intoxicated if the non-intoxicated party had reason to know of the intoxication and took advantage of the intoxication

Question 10

Options for the Incapacitated Party

Answer 10

The incapacitated party can disaffirm the contract or can ratify the contract and keep the benefits of the contract after capacity is obtained

Question 11

Standards to Determine Mental Incapacity

Answer 11

(1) the person cannot understand that nature and consequences of his or her actions; and/or (2) the person cannot act in a reasonable manner in relation to the transaction and the other side knows this