Contracts Flashcards
Contracts by Minors
- A minor who enters into a contract has the right to void the contract upon reaching the age of majority.
- must act promptly to void the contract.
- unenforceable if the minor disaffirms it upon reaching majority.
Statute of Frauds - Contracts Made by Minors
Under Va. Code § 11-2, a written contract is required to enforce:
- A promise made after attaining majority to pay a debt contracted during infancy.
- A ratification after attaining majority of a contract made during infancy.
Without a written agreement, such promises are unenforceable under the Statute of Frauds.
Quantum Meruit (Implied Contract for Services Rendered)
Even if an express contract is unenforceable, a party may recover under quantum meruit if:
- The plaintiff performed valuable services for the defendant.
- The defendant accepted and benefited from the services; and
- It would be unjust for the defendant to retain the benefit without compensating the plaintiff.
Compensation for Quantum Meruit
Based on the reasonable value of services performed minus any prior payments received.
Constructive Trust as an Equitable Remedy
A constructive trust may be imposed where one party has unjustly retained a benefit that rightfully belongs to another.
Equity will intervene to prevent injustice, particularly when a party has provided services with the expectation of compensation.
Suretyship - Statute of Frauds
Under the Statute of Frauds, agreements that promise to answer for the debt or default of another must be in writing and signed by the party to be charged or their agent.
The suretyship provision applies to collateral undertakings where the promisor is a guarantor or surety, receiving no direct benefit and only becoming liable if the debtor defaults.
Parol Evidence Rule
The parol evidence rule applies to written instruments, including deeds. If the language of a written contract is clear and explicit, the court should look no further than the four corners of the instrument and not consider external evidence, such as prior discussions, that contradicts the written terms.
Can a contract be reformed or rescinded for a mutual mistake of fact?
Yes, a contract may be reformed or rescinded in equity for a mutual mistake of fact.
Can a contract be reformed or rescinded for a unilateral mistake of fact?
A unilateral mistake of fact will not invalidate a contract.
If a party to the contract intends for certain language to be included, and it is included in the document (such as a deed), the contract will not be reformed or rescinded based on a unilateral mistake.
Defenses against party seeking equitable relief:
- Unclean Hands
- Availability of a Legal Remedy
- Hardship or Oppression
- Fraud
- Duress
- Undue Influence
- Unconscionability
Rescinding a contract for Fraud requires:
- A false statement of fact (not just an erroneous opinion); or
- Concealment of facts that the party making the statement is bound to disclose;
- Intent to induce the other party to act (or refrain from acting); and
- Reliance by the party to their detriment.
When does an agent bind a principal?
only with express, implied, or apparent authority.
Ratification of Agent’s actions
A principal can be bound by an unauthorized act if they accept the benefits with full knowledge.
Employer Indemnification
An employer can recover from an employee if held liable for their negligent acts.
Generally, waivers of liability are
disfavored and strictly construed against the drafter.
Common Limitations of Liability Waivers in Virginia
- Pre-injury personal injury waivers for negligence are unenforceable.
- Gross negligence can never be waived.
- Bailment waivers are scrutinized and do not excuse all liability.
- Employment and landlord-tenant waivers have statutory limits.
- Consumer waivers can be struck down if unconscionable.
