Contracts (Defenses)

Question 1

List the Defenses

Answer 1

(1) Incapacity as Minor
(2) Incapacity as Incompetent
(3) Misrepresentation
(4) Duress
(5) Undue influence
(6) Unconscionability
(7) Public policy

Question 2

Incapacity as Minor

Answer 2

Voidable by the minor (except for necessaries)

Question 3

Incapacity as Incompetent

Answer 3

Voidable until/unless the incompetent regains composure.

Question 4

Misrepresentation

Answer 4

Fraudulent Misrepresentation: made with scienter, material to the formation of the contract, purchasing party reasonably relied.
Negligent Non fraudulent Misrepresentation:
misrepresentation, material fact on which the purchaser reasonably relied.
Innocent Non fraudulent Misrepresentation: simple misrepresentation (no scienter, no negligence, just turned out to be wrong).
Fraudulent nondisclosure: seller had a duty to disclose, failed to disclose material fact, and the purchaser reasonably relied.

Question 5

Undue Influence

Answer 5

Unfair persuasion of a vulnerable person.
Unfair persuasion based on: Unusual time or place of confrontation; demands of immediacy; emphasis on bad results of delay; multiple persuaders; absence of third party advisors; assertion that there is no time to consult such third parties.
Vulnerability can be based on age, illness, past events, or close relationships.

Question 6

Unconscionability

Answer 6

Procedural: no meaningful choice for the aggrieved party due to absence of bargaining power or failure to understand the terms (age/language barrier)
Substantive: terms are unreasonably beneficial to one party (excessive price, harsh punishment, only binding one party)

Question 7

Duress

Answer 7

a threat wrongful in nature that gives the targeted party no reasonable alternative of action. (either be physical or economic)
Legal Consequences:
Avoidance: contracts made under physical duress are absolutely void, or
Restitution: aggrieved party has right to restitution