Contracts-Defenses to Enforceability

Question 1

Age (Minority)

Answer 1

K w/ a minor is VOIDABLE at option of minor
Once minor reaches age of majority, they can ratify the K

Question 2

Insanity/Mental Illness

Answer 2

K is VOID for individuals w/ mental defects who cannot understand the nature and consequences of the K (i.e., lacks capacity)

Question 3

Duress

Answer 3

Wrongful threat (e.g., a crime or tort, criminal prosecution/civil suit made in bad faith, etc.)
If a party’s assent is induced by an improper threat by the other party that leaves the victim no reasonable alternative, the K is VOIDABLE by the victim

Question 4

Undue Influence

Answer 4

Uneven/unfair bargaining position
Unfair persuasion of a party who is under the domination of the person exercising the persuasion or who, in view of the relationship between them, is susceptible to undue influence

Question 5

Unconscionability

Answer 5

Result of K itself will be unconscionable/unfair
If ct finds a K term so unfavorable to a party that NO REASONABLE PERSON would have agreed
Assessed at the time of K formation

Question 6

Illegality

Answer 6

Unenforceable (duty to perform is discharged)

Question 7

Mistake

Answer 7

Unilateral and Mutual Mistake:
1. Unilateral Mistake: generally NOT a defense, unless: clerical error, unconscionable, or other party had KNOWLEDGE
2. Mutual Mistake: IS generally a defense, requiring (a) basic assumption; (b) material effect; (c) adversely affected party did not assume risk. Remedy to mutual mistake is generally rescission

Question 8

Misrepresentation

Answer 8

1. Intentional Misrepresentation/Fraud: Party (1) made misrepresentation of material fact; (2) w/ knowledge of the statement’s falsity (or reckless disregard); (3) intended to induce reliance of the other party; and (4) caused such justifiable reliance giving rise to pecuniary damage.
2. Negligent Misrepresentation: Party (1) negligently made/omitted; (2) false statement of material fact; and (3) which caused the other party to justifiably rely to their detriment

Question 9

Non-Compete Clauses

Answer 9

Generally enforceable if reasonable under the circumstances

Question 10

Statute of Frauds

Answer 10

Certain K need to be in writing:
MYLEGS (Marriage, Year, Land, Executor, Guarantor, Sale of goods $500 or more)
Exceptions (no writing required):
M (1) K for the marriage itself (as opposed to K made in consideration of marriage)
Y (2) Full performance
L (3) Part performance (down payment + improvement or possession)
E (4)
G (5) Main purpose is to benefit the guarantor/promisor themselves (self-serving)
S (6) Accepted or Paid for goods/Admission/Specially Manufactured goods

Question 11

Merchant Confirmation Exception to SOF

Answer 11

(1) Btw 2 merchants;
(2) One party receives a signed confirmation that includes the quantity; AND
(3) No objection by the recipient w/in 10 days of receipt

Question 12

SOF Writing Requirement (i.e., what must the writing contain?)

Answer 12

(1) Parties; (2) subject matter; (3) essential/material terms of the K (e.g., quantity); and (4) signed by the party to be charged