Contracts III part 2 Flashcards
1
Q
• Alexus owes Kaitlyn 1,000. In consideration of Kaitlyn’s oral agreement to discharge the debt, Alexus promise to transfer Blackacre to Kaitlyn. Alexus tenders Kaitlyn a deed of Blackacre. Kaitlyn refuses the tender and sues for 1,000. Can Kaitlyn recover?
A
Whether or not Alexus has signed a memorandum sufficient to charge her, Kaitlyn can recover.
2
Q
• Alexus contracts to transfer land to Kaitlyn for 10,000, and Kaitlyn pays 1,000. Kaitlyn does not sign a memorandum and sues to recover the 1,000 payment on the ground that the contract is unenforceable under the SOF. Alexus is willing and able to perform. Can Kaitlyn recover?
A
Kaitlyn cannot recover.
3
Q
• Alexus and Kaitlyn enter into an oral contract for the performance of services by Alexus extending over a period of two years, Kaitlyn promising to pay 5,000 on completion of the services. After six months work Alexus demands Kaitlyn sign a written memorandum of the contract. Kaitlyn refuses, and Alexus quits work and sues for the value of the work done. Can Alexus recover?
A
Alexus can recover without deduction for damages caused by Alexus’s quitting.
4
Q
• Alexus enters into an oral contract with Kaitlyn by which Alexus promises to transfer Blackacre to Kaitlyn and Kaitlyn promise to pay 5,000, Kaitlyn to have an immediate licenses to go upon land. Kaitlyn does so. Alexus sues for trespass. Kaitlyn tenders 5,000 and demands a transfer. Does Alexus need to accept or make a transfer? Does Kaitlyn have a defense? (yes or no)
A
Alexus need not accept the money or make a transfer, but Kaitlyn has a good defense to Alexus’s action for trespass.
5
Q
• Alexus renders services to Kaitlyn under an oral contract within the statute by which Kaitlyn promises to pay for the services. On Kaitlyn’s refusal to pay, Alexus sues for the value of the services. Is the contract admissable?
A
The oral contract is admissible as evidence that the services were not rendered officiously or as a gift, and as evidence of the value of the services.
6
Q
• Alexus sues Kaitlyn on a debt and garnishes Anna, who borrowed money from Kaitlyn. In defense, Anna offers to prove an oral contract with Kaitlyn whereby Kaitlyn agreed to discharge Anna in return for Anna’s oral promise to transfer Blackacre to Barbara at a future day. is the contract enforceable? Or is it evidence for a defense.
A
. Since the oral contract, though unenforceable, would establish a good defense to the garnishment under 144, it is admissible.
7
Q
• Alexus owns goods in Kaitlyn’s possession and sells the goods to Anna on credit. The Statute is not satisfied. At Anna’s request Kaitlyn ships the goods to Anna before any repudiation by Alexus. The goods are lost in transit, Anna repudiates the sale and Alexus sues Kaitlyn for conversion. is the contract admissible as evidence?
A
The contract is admissible in evidence to prove that Anna rather than Alexus was the owner of the goods.
8
Q
• Alexus and Kaitlyn make a contract which is unenforceable by virtue of the Statute. Anna prevents Kaitlyn from performing and Anna’s conduct would be tortious if the contract was enforceable. Does the statute impair Anna’s tort liability?
A
The Statute does not impair Anna’s tort liability to Alexus or Kaitlyn.
9
Q
• Alexus contracts to sell a ship to Kaitlyn. The Statute is not satisfied. Kaitlyn insures the ship with Anna, an insurance company. The ship is lost. Does Anna have a defense?
A
The Statute provides no defense to Anna.
10
Q
• Alexus contracts to sell specific goods to Kaitlyn, titled to pass at once. Alexus retains possession and the contract is unenforceable, but the sale is not fraudulent under any rule of law. Anna, Alexus’s creditor, attaches the goods as Alexus’s before any repudiation of the contract. Is the attachment valid against Kaitlyn?
A
The attachment is invalid as against Kaitlyn.
11
Q
• Alexus promises orally to sell Blackacre to Kaitlyn and Kaitlyn pays Alexus the price. Later Alexus incurs debt which render her insolvent. Alexus then signs a sufficient memorandum, or conveys the land to Kaitlyn.
A
. Alexus’s creditor cannot set aside the contract or transfer as in fraud of creditors.
12
Q
• Alexus owes Kaitlyn a debt of 20,000. Alexus’s land, worth 10,000, is about to be sold on foreclosure under a mortgage held by Anna. Kaitlyn contracts to bid in the land and to deduct from Alexus’s debt to Kaitlyn 10,00 less the amount Kaitlyn pays. Kaitlyn bids in the land for 6,000. Is alexus’s debt reduced?
A
Alexus’s debt is reduced by 4,000.
13
Q
• At Barbara’s request Ashlyn orally guarantees to Anna that Barbara will pay a debt Barbara owes to anna. On Barbara’s failure to pay at maturity, Ashlyn pays the debt. Does Anna have claim against Barbara?
A
Anna’s claim against Barbara is discharged, and Ashlyn has the same rights against Barbara as if Ashlyn’s promises to Anna had been enforceable.
14
Q
• Alexus orally contracts to sell Blackacre to Kaitlyn. Later Alexus contracts in a signed writing to sell Blackacre to anna. Therefore, Alexus signs a memorandum of her contract with knowledge of Kaitlyn. Can Kaitlyn enforce the contract against Anna and Alexus?
A
Kaitlyn can enforce the contract specifically against Alexus and Anna, whether Anna entered into her contract with knowledge of Kaitlyn’s, and whether or not Kaitlyn knew of Anna’s contract when the memorandum was signed. Anna may recover damages from Alexus.
15
Q
• Alexus orally contracts to sell Blackacre to Kaitlyn. She transfers Blackacre to Anna by deed as a gift, Anna having knowledge of the contract with Kaitlyn. Alexus subsequently signs a memorandum of the contract with Kaitlyn. Who can Kaitlyn recover from?
A
Kaitlyn may recover damages from Alexus but cannot enforce the contract specifically against Anna.
16
Q
Alexus orally contracts to sell Blackacre to Kaitlyn. She transfers Blackacre to Anna by deed as a gift, Anna having knowledge of the contract with Kaitlyn. Alexus signs the memorandum before the conveyance to Anna. Who can Kaitlyn enforce the contract against?
A
. Kaitlyn can enforce the contract against Alexus and Anna.
17
Q
• Alexus orally contracts to sell Blackacre to Kaitlyn. Later a creditor of Alexus attaches Blackacre. Thereafter Alexus signs a memorandum of the contract. Who can Kaitlyn enforce the contract against?
A
Kaitlyn can enforce the contract specifically against Alexus and the creditor.
18
Q
• Alexus, a bachelorette, orally contracts to sell Blackacre to Kaitlyn. Alexus marries. Thereafter Alexus signs a memorandum of the contract. Does the wife have interest in Blackacre?
A
Alexus wife has no dower interest in Blackacre.
19
Q
• In consideration of Alexus’s oral promise to marry Kaitlyn and to settle 5,000 upon her, Kaitlyn promises to marry Alexus.
A
. If Alexus refuses to marry Kaitlyn after Kaitlyn expresses assent to forego the settlement, the SOF does not preclude an action by Kaitlyn against Alexus for breach of promise to marry.
20
Q
• For a single premium Alexus orally insures a shipment of Kaitlyn’s goods against fire and also orally agrees to answer for certain defaults of the carrier. The goods are damaged by fire.
A
The SOF does not prevent enforcement of the fire insurance
21
Q
• Alexus promises to make a will leaving real and personal property to Kaitlyn in return for services to be rendered by Kaitlyn. Kaitlyn renders the services, but Alexus dies leaving the property to someone else.
A
If the SOF makes the contract unenforceable as to the real property, it is equally unenforceable as to the personal property.
22
Q
• Alexus and Kaitlyn orally agree that Alexus will work for Kaitlyn for six months and that Kaitlyn will transfer Alexus an automobile valued at 1,400 and pay Alexus 600 a month salary. Later the Statute is satisfied with respect to the sale of the automobile by receipt and acceptance.
A
The balance of the contract becomes enforceable.
23
Q
• Alexus employs Kaitlyn as a plant manager under an oral agreement that Kaitlyn will be paid 600 a month and given an option to buy the plant, including real and personal property, on stated terms, but that Alexus may substitute for the option an additional payment of 900 per month from the time Kaitlyn starts work. The amounts involved are not disproportionate. Kaitlyn works several months and gives notice of her exercise of the option, but Alexus refuses to sell. Does the SOF prevent recovery?
A
The SOF does not prevent Kaitlyn’s recovery of the additional payment.
24
Q
• Alexus and Kaitlyn orally agree that Alexus will work for Kaitlyn for six months and that Kaitlyn will transfer to Alexus an automobile work 2,400 and pay a 600-month salary. The SOF is not satisfied with respect to the sale of the automobile. Is it enforceable?
A
in the absence of a waiver by Alexus, the entire contract is unenforceable.
25
• Alexus and Barbara enter into a written contract of employment for a term exceeding a year. Later they orally agree to rescind the contract. Is the oral agreement effective?
. The oral agreement is effective, and the written contract is rescinded.
26
• Alexus contracts to sell and Kaitlyn to buy a refrigerator for the price of 500, and the refrigerator is delivered and paid for. One-week later Alexus and Kaitlyn orally agree that if Kaitlyn is not satisfied after a week’s further trial the transaction will be rescinded. There is not redelivery or repayment. Is the contract of rescission enforceable?
The contract of rescission is unenforceable.
27
• Alexus and Kaitlyn contract in writing that Alexus will sell, and Kaitlyn will buy Blackacre for 140,000. Later Alexus and Kaitlyn orally rescind the written contract. Enforceable?
The written contract is not enforceable.
28
• Alexus and Kaitlyn make a written contract that Alexus will employ Kaitlyn for two years at 500 a month. At the time Kaitlyn begins work, the agree orally to substitute a contract for six months at 600 a month. Is the second contract within SOF? Is it enforceable?
The second contract is not within the Statute, is enforceable, and at once discharges the prior contract.
29
Alexus and Kaitlyn make a written contract that Alexus will repair and sell to Kaitlyn two specific appliances for 3,000. Later they agree orally to eliminate one appliance and to reduce the price.
Whether the second contract is within the Statute depends on whether the reduced price is 500 or more.
30
• Alexus and Kaitlyn make mutual promises to marry within one month. Later they orally agree that the marriage will be postponed for two years.
The oral agreement is not enforceable.
31
• In the marriage illustrations the original promises to marry are not within the SOF.
They remain enforceable unless there is a material change of position.
32
• Alexus promises to sell and Kaitlyn to buy a specific automobile for 3,000, delivery to be made in 30 days and payment in 60 days. Both parties sign a sufficient memorandum. The next day they orally agree on delivery in 45 days and payment in 90 days. Before any change of position Kaitlyn repudiates the oral agreement. Is the oral agreement enforceable?
. The oral agreement is not enforceable; the original contract remains enforceable.
33
• Alexus and Kaitlyn make an enforceable oral contract that Alexus will work for Kaitlyn for 30 days and 20 a day. The next day Alexus and Kaitlyn orally contract to substitute employment for two years at 6,000 a year. Are either contract enforceable?
The first contract remains enforceable; the second is not.
34
• Alexus contracts with Kaitlyn that Alexus will manufacture and sell to Kaitlyn described goods in installments at stated prices. Later Alexus and Kaitlyn agree in writing signed by Kaitlyn but not Alexus that the undelivered balance of goods will be cancelled, and that Alexus will deliver a different type of goods at different prices.
Even though the later agreement is not enforceable against Alexus and even though no action is taken under it, the original contract is rescinded.
35
• Alexus and Kaitlyn contract in writing that Alexus will sell specific goods to Kaitlyn for 1,000 deliveries to be made in 30 days and payment in 60 days. Ten days later Kaitlyn orally requests that delivery be delayed until 45 days, and Alexus delays in reliance on the request. Is the delay a breach?
The delay in not a breach of Alexus’s duty and does not excuse Kaitlyn from performing.
36
Alexus and Kaitlyn contract in writing that Alexus will sell specific goods to Kaitlyn for 1,000 deliveries to be made in 30 days and payment in 60 days. Ten days later Kaitlyn orally requests that delivery be delayed until 45 days, and Alexus delays in reliance on the request. Kaitlyn retracts her request for the delay early enough to enable Alexus without difficulty to deliver in accordance with the original terms.
Alexus is no longer justified in relying on Kaitlyn’s request for delay, either excuse performance of Alexus’s duty or to deny Kaitlyn an excuse for non-performance.
37
Alexus and Kaitlyn contract in writing that Alexus will sell specific goods to Kaitlyn for 1,000 deliveries to be made in 30 days and payment in 60 days. Ten days later Kaitlyn orally requests that delivery be delayed until 45 days, and Alexus delays in reliance on the request. Alexus is unable to deliver for reasons independent of Kaitlyn request for delay.
The request does not excuse Alexus’s delay.
38
• Alexus and Kaitlyn contract in writing that Alexus will sell, and Kaitlyn will buy a parcel of land on stated terms. Kaitlyn’s promise to buy is conditional on delivery by Alexus within three days of a certificate showing her title. Alexus does not furnish the certificate, and after three days Kaitlyn orally tells Alexus that she need not furnish the certificate.
Though Kaitlyn’s implied promise to buy without the certificate is binding without consideration, in the absence of reliance the promise is unenforceable by virtue of SOF
39
• Alexus, seeking to induce Kaitlyn to make a contract to buy a used car, turns the odometer back from 60,000 to 18,000 miles. Kaitlyn makes the contract. Is it misrep?
Alexus’s conduct in setting the odometer is a misrepresentation. Whether the contract is voidable by Kaitlyn is determined by the rule stated in 164
40
• Alexus, seeking to induce Kaitlyn to make a contract to lease a particular generator, writes Kaitlyn a letter with the intention of describing its output correctly as “1200 kilowatts” because of an error of Alexus’s typist, unnoticed by Alexus, the letter states that the output of the generator is 2100. Kaitlyn makes the contract. Is it misrep?
. Alexus’s statement is a misrepresentation. Whether the contract is voidable by Kaitlyn is determined by rule 164
41
• Alexus, seeking induce Kaitlyn to make a contract to buy land, tells Kaitlyn that her title to the land has been upheld in a court decision. Alexus knows that the decision has been appealed but does not tell that to Kaitlyn. Kaitlyn makes the contract. Misrep? Why?
Alexus’s statement omits matter necessary to prevent the implied assertion that Alexus’s tittle is clearly established, and this assertion is a misrep.
42
• Alexus, seeking to induce Kaitlyn to make a contract to buy an apartment house, tells Kaitlyn the apartments are all rented to tenants at 200 a month. Alexus knows that the rent of 200 has not been approved by the local rent control authorities and that without this approval it is illegal but does not tell this to Kaitlyn. Kaitlyn makes the contract. Misrep?
Alexus’s statement omits matter needed to prevent the implied assertions that the rent is legal, and this assertion is misrep.
43
• Alexus, seeking to induce Kaitlyn to make a contract to buy land, promises Kaitlyn to build an expensive house on an adjoining tract. Alexus knows that she neither owns nor has such an interest in the tract that she can perform the promise, although she hopes to perform it. Kaitlyn makes the contract. Misrep?
Alexus’s promise implies an assertion that she owns that tract and has such an interest in adjoining tract that she can perform her promise, and this assertion is a misrep.
44
• Alexus seeking to induce Kaitlyn to buy a furnace, tells Kaitlyn that it will give a stated amount of heat while consuming only a stated amount of fuel. Alexus knows that the furnace is not capable of such efficiency. Kaitlyn makes the contract. Misrep?
Kaitlyn’s statement implies an assertion that the furnace has an existing capability of such efficiency, and it’s a misrep.
45
• Alexus seeking to induce Kaitlyn to make a contract to buy her house, paints the basement floor in order to prevent Kaitlyn from discovering that the foundation is cracked. Kaitlyn is prevented from discovering the defect and makes the contract. Misrep? What kind?
The concealment is equivalent to an assertion that the foundation is not cracked, and this assertion is a misrep.
46
• Alexus, seeking to induce Kaitlyn to make a contract to buy her house, convinces Anna, who, is about to tell Kaitlyn that the foundation is cracked, to say nothing to Kaitlyn about the foundation. Kaitlyn is prevented from discovering the defect and makes the contract.
. Alexus’s conduct is equal to an assertion and it’s a misrap.
47
• Alexus makes to Kaitlyn, a credit rating company, a true statement of his financial condition, intending that its substance be published to Kaitlyn’s subscribers. Kaitlyn summarizes the info and transmits the summary to Anna, a subscriber. Shortly after, Alexus’s financial condition becomes seriously impaired, but she does not disclose this to Kaitlyn. Anna makes a contract to lend money to Alexus. Misrep? What kind?
. Alexus’s non-disclosure is equal to an assertion and its misrep.
48
• Alexus seeking to induce Kaitlyn to make a contract to buy a thoroughbred mare, tells Kaitlyn that the mare is in foal to a well-known stallion. Unknown to Alexus, the mare has a miscarriage. Alexus learns of the miscarriage but does not disclose it to Kaitlyn.
Alexus’s non-disclosure is misrep.
49
• Alexus, in casual conversation with Kaitlyn, tells Kaitlyn that a tract of land owned by Alexus contains thirty acres. Alexus knows that it contains only twenty-nine acres but misstates its area because she does not regard the figure as important. Alexus’s statement is not fraudulent because it is not made with the intention of inducing Kaitlyn to buy the land. Kaitlyn later offers to buy the tract from Alexus. Alexus does not disclose it true area to Kaitlyn, for fear that Kaitlyn will not buy it, and accepts Kaitlyn’s offer.
Alexus’s non-disclosure is a new assertation that is fraud misrep.
50
• Alexus, seeking to induce Kaitlyn to make a contract to buy land, knows that Kaitlyn does not know that the land has been filled with debris and covered but does not disclose this to Kaitlyn. Kaitlyn makes the contract.
. Alexus’s non-disclosure is equal to an assertion that the land has not been filled with debris and covered, and its is a misrep.
51
• Alexus, seeking to induce Kaitlyn to buy Alexus’s home, knows that Kaitlyn does not know that they house is riddled with termites but does not disclose this to Kaitlyn. Kaitlyn makes the contract.
Alexus’s non-disclosure is equal to an assertion and is misrep.
52
• Alexus, seeking to induce Kaitlyn to contract to buy food-processing business, knows that Kaitlyn does not know that the health department has given repeated warning that a necessary license will not be renewed unless expensive improvements are made but does not disclose this to Kaitlyn. Kaitlyn makes the contract.
Alexus’s non-disclosure is equal to an assertion and its misrep.
53
• Alexus, seeking to induce Kaitlyn to make a contract to sell land, knows that Kaitlyn does not know that the land has appreciably increased in value bc of a proposed shopping enter but does not disclose this to Kaitlyn. Kaitlyn makes the contract.
Since Kaitlyn is not one as toa basic assumption, Alexus’s non-disclosure is not equal to assertion and not misrep.
54
• In response to Kaitlyn’s invitation for bids on the construction of a building according to stated specifications, Alexus submits an offer to do the work for 150,000. Alexus believes that this is a total of a column of figures, but she has made an error by inadvertently omitting a 5,000 item, and in fact that total is 155,000. Kaitlyn knows this but accepts Alexus’s bid without disclosing it.
Kaitlyn’s non-disclosure is equal to assertion and is misrep.
55
• In answer to an inquiry from JB Smith company, Alexus offers to sell goods for cash on delivery. Alexus mistakenly believes that the offeree is John B Smith, who has an established business of goods repute, but in fact it is a business run by his son, with whom Alexus has refused to deal because of previous disputes. The son learns of Alexus’s mistake but accepts Alexus’s offer without disclosing her identity.
The sons non-disclosure is equal to an assertion and it misrep.
56
• Alexus, seeking to induce Kaitlyn to make a contract to sell Alexus land, learns from government surveys that the land contains valuable mineral deposits and knows that Kaitlyn does not know it and Alexus does not disclose it. Kaitlyn makes the contract.
Alexus non-disclosure does not amount to a failure to act in good faith and in accordance with reasonable standards of fair dealings and is therefore not equal to an assertion or misrep. Not voidable.
57
• The facts above, Alexus learns of the valuable mineral deposits from trespassing on Kaitlyn’s land and not from the government survey.
Alexus’s non-disclosure is equal to an assertion, and it is misrep.
58
• Alexus, seeking to induce Kaitlyn to make a contract to sell a tract of land to Alexus for 100,000 makes a written offer to Kaitlyn. Alexus knows that Kaitlyn mistakenly thinks that the offer contains a provision under which Alexus assumes an existing mortgage, and she knows that it does not contains such a provision but does not disclose this to Kaitlyn. Kaitlyn signs the writing, which is an integrated agreement.
Alexus’s non-disclosure is equal to an assertion, and it is misrep.
59
• Alexus, who is experienced in business, has raised Kaitlyn, a young woman, in her household, and Kaitlyn has habitually followed her advice, although Alexus is neither her parent nor her guardian. Alexus, seeking to induce Kaitlyn to make a contract to sell land to Alexus, knows that the land has appreciably increased in value because of a planned shopping center but does not disclose this to Kaitlyn. Kaitlyn makes the contract.
Alexus’s non-disclosure is equal to an assertion and is misrep.
60
• Alexus makes to Kaitlyn, a credit rating company, a statement of her financial condition that she knows is untrue, intending that its substance be published to Kaitlyn’s subscribers. Kaitlyn summarizes the information and transmits the summary to Anna, a subscriber. Anna thereby induced to make a contract to lend money to Alexus. Misrep? What kind?
Alexus’s statement is fraud misrep and the contract is voidable.
61
• Alexus, seeking to induce Kaitlyn to make a contract to buy her house, tells Kaitlyn that the plumbing is of pipe of a specified quality. Alexus does not know the quality, and it is not of the specified quality. Kaitlyn induced by Alexus’s statement to make the contract.
The statement is a fraudulent misrep. Both because Alexus does not have the confidence that she implies and because she knows that she does not have the basis for that she implies. Voidable.
62
• Alexus, while negotiating with Kaitlyn for the sale Alexus’s racehorse, tell her that the horse can run a mile in a specified time. Alexus is honestly mistaken, and unknown to her, the horse has never come close to that time. Kaitlyn is induced by Alexus’s assertion to make a contract to buy the horse.
Alexus’s statement, although not fraud, is a material misrep, and the contract is voidable.
63
• Alexus, while negotiating with Kaitlyn for the sale of Alexus’s racehorse, tells her that the horse was bred in a specified stable. Alexus is honestly mistaken, and unknown to her, it was bred in another stable of better reputation. The specified stable was, unknown to Alexus, founded by Kaitlyn’s grandfather, and Kaitlyn is thereby induced by Alexus’s assertion.
. Alexus’s misrep is neither fraud or material and the contract is not voidable.
64
• The facts above, Alexus knows the named stable was founded by Kaitlyn’s grandfather and that Kaitlyn would like to own a horse bed there.
Alexus’s misrep, although not fraud, is material, and the contract is voidable.
65
• Alexus, seeking to induce Kaitlyn to make a contract to sell her goods on credit, tells Kaitlyn that she is Anna, a well-known millionaire. Kaitlyn is induced by the statement to make the proposed contract with Alexus
. Kaitlyn’s apparent manifestation of assent is effective. However, the contract is voidable by Kaitlyn under rule in 164.
66
• Alexus and Kaitlyn reach an understanding that they will execute a written contract containing terms on which they have agreed. It is properly prepared and is read by Kaitlyn, but Alexus substitutes a writing containing essential terms that are different from those agreed upon and thereby induces Kaitlyn to sign it in belief that it is the one she has read. Is the apparent MOA effective?
. Kaitlyn’s apparent manifestation of assent is not effective.
67
• Alexus and Kaitlyn reach an understanding that they will execute a written contract containing terms on which they have agreed. Alexus prepares a writing containing essential terms that are different from those agreed upon and induces to Kaitlyn to sign it by telling her that it contains the terms and that is not necessary for her to read it.
Kaitlyn’s apparent manifestation of assent is effective if Kaitlyn had reasonable opportunity to read the writing. However, the contract is voidable by Kaitlyn under 164. In alternative, at the request of Kaitlyn, the court will decree that the writing be reformed to conform to their understanding under the rule in 166.
68
• The facts above, Kaitlyn is blind and gets Anna to read the writing to her, but Anna, in collusion with Alexus, reads it wrongly.
Kaitlyn apparent manifestation of assent is not effective.
69
• Alexus, seeking to induce Kaitlyn to make a contract to buy a tract of land at a price of 1,000 an acre, tells Kaitlyn that the tract contains 100 acres. Alexus knows that it contains only 90 acres. Kaitlyn is induced by the statement to make the contract.
. Because the statement is a fraudulent misrep, the contract is voidable by Kaitlyn, regardless of whether it was material or not.
70
• Alexus, seeking to induce Kaitlyn to make a contract to buy a tract of land at a price of 1,000 an acre, tells Kaitlyn that the tract contains 100 acres. Alexus is mistaken and does not know the land contains only 90 acres.
Because the statement is not fraudulent misrep, the contract is voidable by Kaitlyn only if the misrep is material.
71
• Alexus and Kaitlyn agree that Alexus will buy a tract of land from Kaitlyn for 100,000 and will assume an existing mortgage of 50,000. In reducing the agreement to writing, Alexus intentionally omits the provision for assumption but tells Kaitlyn that the writing correctly expresses their agreement. Kaitlyn does not notice the omission and is induced by Alexus’s statement to sign the writing.
The misrep is both fraud and material, and the contract is voidable by Kaitlyn.
72
• Alexus, who is not Anna’s agent, induces Kaitlyn by a fraudulent misrep to make a contract when Anna to sell land to Anna. Anna promises to pay the agreed price, not knowing or having reason to know of the fraudulent misrep.
Since Anna’s promise to pay is value, the contract is not voidable by Kaitlyn. The contract would be voidable by Kaitlyn if Anna learned or acquired reason to know of the fraudulent misrep before promising to pay.
73
• Alexus, who is not Anna’s agent, induces by a fraudulent misrep to sign a pledge by which Kaitlyn promises Anna, a charitable corp, to contribute a sum of money. Anna does not know or have reason to know of the fraudulent representation.
Kaitlyn’s promise, although binding, is voidable by Kaitlyn. Kaitlyn’s promises would not be voidable if Anna materially changed its position in reliance on Kaitlyn’s promise before learning or acquiring reason to know of the fraudulent misrep.
74
• Alexus and Kaitlyn agree that Alexus will buy a tract of land from Kaitlyn for 10,000 and will assume an existing mortgage of 50,000. In reducing the agreement to writing, Alexus intentionally omits the provision for assumption and tells Kaitlyn that the writing correctly expresses their agreement. Kaitlyn does not notice the omission and is induced by Alexus’s fraudulent misrep to sign the writing, which is an integrated agreement. Can the court add in the assumed provision?
At the request of Kaitlyn, the court will reform the writing to add the provision for assumption.
75
• Alexus seeking to induce Kaitlyn to make a contract to sell a tract of land to Alexus for 100,000, makes a written offer to Kaitlyn and tells Kaitlyn that it includes a provision under which Alexus assumes an existing mortgage. Alexus knows that the writing does not contain such a provision. Kaitlyn does not notice the omission and is induced by Alexus’s fraudulent misrep to sign the writing, which is an integrated agreement.
At the request of Kaitlyn, the court will reform the writing to add the provision for assumption
76
• Alexus seeking to induce Kaitlyn to make a contract to sell a tract of land to Alexus for 100,000, makes a written offer to Kaitlyn and tells Kaitlyn that the legal effect of the provision is that Alexus assumes an existing mortgage. Alexus, who is a lawyer, knows that this is not a legal effect of the provision. Kaitlyn does not realize that the legal effect of the provision is not as asserted and is induced by Alexus’s fraudulent misrep to sign
At the request of Kaitlyn, the court will reform the writing to add the provision.
77
• Alexus, seeking to induce Kaitlyn to make a contract to buy a tract of land at a price of 100,000, makes a written offer that says the tract contains 100 acres. Alexus knows that it contains only 90 acres. Kaitlyn is induced by Alexus’s fraudulent misrep to sign the writing.
. The court will not, at the request of Kaitlyn, reform the writing because the mistake of the parties was not one as to the contents or effect of the writing. Kaitlyn’s right to avoidance is governed by the rule 164.
78
• Alexus, seeking to induce Kaitlyn to make a contract to buy land, makes a fraudulent misrep. Although she believes Alexus’s assertion, Kaitlyn wishes to confirm it and therefore inspects the land and inquires of third persons. Kaitlyn then makes the contract. The misrep substantially contributes to her decision to make the contract, although she is also induced to do so by her investigation and inquires.
Kaitlyn’s manifestation of assent is induced by the misrep, and the contract is voidable by Kaitlyn.
79
• Alexus, seeking to induce Kaitlyn to make a contract to buy land, one a true assertion and one a fraudulent misrep. Kaitlyn makes the contract. The fraudulent misrep substantially contributes to her decision to make the contract, although she is also induced to do so by the true assertion.
Kaitlyn’s manifestation of assent is induced by the misrep, and the contract is voidable.
80
• Alexus, seeking to induce Kaitlyn to make a contract to buy her racehorse, tells her that the horse has run a mile in a specified time. Alexus is honestly mistaken, and unknown to him, the horse has never come close to that time. Kaitlyn makes the contract.
. Because Alexus’s misrep is material, it will be assumed, in the absence of facts showing the contrary, that Kaitlyn attached importance to the truth in deciding to make the contract. The contract is therefore voidable.
81
• Alexus, seeking to induce Kaitlyn to make a contract to buy her racehorse, tell her that the horse was bred in a particular stable. Alexus knows that it was bred in another stable. Kaitlyn makes the contract. If Alexus’s misrep is not material, it will not be assumed that Kaitlyn’s attached importance to its truth in deciding to make the contract
Unless other evidence shows that Kaitlyn relief on the misrep, the contract is not voidable
82
• Alexus, seeking in induce Kaitlyn to make a contract to buy goods, tells Kaitlyn that she paid 10,000 for them. Alexus knows that she paid 8,000 for the goods. Opinion?
The statement is not one of opinion.
83
• The facts above, Alexus tells Kaitlyn only hat the goods are worth 10,000.
The is opinion.
84
• Alexus, seeking to induce Kaitlyn to make a contract to buy real property, says the sewage system is good. Alexus knows that the sewage system is unworkable. Kaitlyn interprets Alexus’s opinion as an assertion that the facts known to Alexus are not incompatible with her opinion and is induced by this assertion to make the contract.
Kaitlyn interpretation is reasonable, the assertion is a fraudulent misrep and its voidable.
85
• Above facts, Alexus knows that the sewage system is not very good but is workable.
There is no misrep bc the facts known to Alexus are not incompatible with her opinion, and the contract is not voidable.
86
• Alexus, seeking to induce Kaitlyn to make a contract to become Alexus’s partner in Alexus’s business, tells Kaitlyn that the business is a moneymaker. Alexus knows that the business has been unprofitable since its inception. Kaitlyn interprets Alexus’s opinion as an assertion of fact.
Kaitlyn’s interpret is reasonable and its fraud misrep and its voidable
87
• Alexus, who is knowledgeable in financial matters, seeking to induce Kaitlyn, who is also knowledgeable in such matters, to make a contract to buy Alexus’s stocks in Anna’s company, tell Kaitlyn that within five years the shares will pay dividend that will amount to the purchase price of the stock. Neither Alexus nor Kaitlyn has information about the finances of Anna, which is, hopelessly insolvent. Kaitlyn interprets Alexus statement of opinion as an assertion that Alexus knows facts sufficient to justify her in forming that opinion.
Kaitlyn is reasonable and its misrep and voidable.
88
• Alexus, seeking to induce Kaitlyn to make a contract to buy land, tells Kaitlyn “There is water under this land and if you dig well anywhere on the land, you will strike it” Alexus does not know whether there is water under the land, and there is none. Kaitlyn knows that no water survey has been made and that Alexus has no information concerning the presence of absence of subterranean water but interprets Alexus’s opinion as an assertion that Alexus knows facts sufficient enough to justify her forming the opinion.
Kaitlyn’s interpretation is not reasonable, and the contract is not voidable.
89
• Alexus, professing friendship, offers to advise Kaitlyn, an elderly widow inexperienced in business, concerning her investments. She does do for five years, giving her good advice and acquiring her trust and confidence. At the end of this time, she advices her to buy her worthless shares of stock, telling her that in her opinion it is a good investment. Kaitlyn is induced by Alexus’s statement to make the contract.
Kaitlyn reliance on Alexus’s statement is justified and the contract is voidable.
90
• Alexus, the proprietor of a dance studio, seeking to induce Kaitlyn, a 60-year-old widow with no background in dancing to make a contract for dance lessons, tells Kaitlyn that she has dance potential and would develop into a beautiful dancer. Alexus knows that Kaitlyn has little aptitude as a dancer. Kaitlyn is induced by Alexus’s statement of opinion to make the proposed contract.
. Kaitlyn’s reliance on Alexus’s statement of opinion is justified and voidable
91
• Alexus, seeking to induce Kaitlyn to make a contract to buy land, tells Kaitlyn that Anna, a local businesses woman, shortly before her death offered her 50,000 for the land. Alexus knows that Anna offered only 40,000 for the land. Kaitlyn infers from Alexus’s statement that Anna’s opinion the land was worth 50,000 and believing that Anna has special objectivity is induced by the statement to make the contract.
. Kaitlyn’s reliance is justified, and the contract is voidable by Kaitlyn.
92
• Alexus seeking to induce Kaitlyn, who is particularly inexperienced and gullible, to make a contract to buy property, tells Kaitlyn that the value is 35,000. Alexus knows that it is particularly worthless. Kaitlyn is induced by Alexus’s statement to make the contract.
If Kaitlyn’s reliance is justified because her inexperienced and gullibility make her particularly susceptible to such a misrep, the contract is voidable.
93
• Alexus, the owner of a real estate development, seeking to induce Kaitlyn to make a contract to buy a lot in it, tells Kaitlyn that he intends to construct a golf course in the development. Alexus has no such intention. Kaitlyn is induced by Alexus’s statement to make the contract.
The contract is voidable by Kaitlyn. However, if Kaitlyn knew that the terrain is not suitable for a golf course, that there is not enough land for it, and that it could only be constructed by purchase of a large quantity of additional land quite beyond Alexus’s means, Kaitlyn’s reliance is not justified and the contract is not voidable.
94
• Alexus, seeking to induce Kaitlyn to make a contract to sell a tract of land, tells Kaitlyn that she intend to hold the tract as an investment. Alexus intends instead to combine the tract with others as part of a large development but declines to tell Kaitlyn this in order to prevent Kaitlyn from asking for a higher price. Kaitlyn is induced by Alexus’s statement to make the contract.
. If the court concludes that, in all the circumstances, Alexus’s statement was not contrary to reasonable standards of dealing, the contract is not voidable by Kaitlyn.
95
• Alexus seeking to induce Kaitlyn to make a contract to sell a tract of land, tells Kaitlyn that she intends to use the tract for construction of a residence. Alexus intends instead to use it for the construction of an industrial building but declines to tell Kaitlyn this because Kaitlyn owns an adjacent tract that will be adversely affected if Alexus carries out her real intentions. Kaitlyn is induced by Alexus’s non-disclosure to make the contract.
The contract is voidable.
96
• Alexus, seeking to induce Kaitlyn to make a contract to have work done on her house, and to make a part payment of 1,000, promises to do the work for a stated price. Alexus does not intend to perform the contract. Kaitlyn is induced by Alexus’s promise to make the contract and the part payment. Kaitlyn may interpret Alexus’s promise as an assertion of her intention to perform.
The assertion is fraud misrep and its voidable.
97
• Alexus presents to Kaitlyn, who is physically weaker than Alexus, a written contract prepared for Kaitlyn’s signature and demands that Kaitlyn sign it. Kaitlyn refuses. Alexus grasps Kaitlyn’s hand and compels Kaitlyn by physical force to write her name.
. Kaitlyn signature is not effective as a manifestation of her assent, and there is no contract.
98
• Alexus makes an improper threat to commence civil proceedings against Kaitlyn unless Kaitlyn agrees to discharge a claim that Kaitlyn has against Alexus. In order to avoid defending the threatened suit, Kaitlyn is induced to make the contract. RA?
. Defense of the threatened suit is a reasonable alternative, the threat does not amount to duress, and the contract is not voidable by Kaitlyn
99
• Alexus makes an improper threat to commence a civil action and to file a lis pendens against a tract of land owned by Kaitlyn, unless Kaitlyn agree to discharge a claim that Kaitlyn has against Alexus. Because Kaitlyn is about to make a contract with Anna for the sale of the land and Anna refuses to make the contract if the levy is made, Kaitlyn agrees to discharge the claim.
Kaitlyn has no reasonable alternative, Alexus’s threat is duress, and the contract is voidable.
100
• Alexus, with whom Kaitlyn has left a machine for repairs, makes an improper threat to refuse to deliver the machine to Kaitlyn, although Kaitlyn has paid for the repairs, unless Kaitlyn agrees to make a contract to have additional repaid work done. Kaitlyn can replevy the machine, but because she is in urgent need of it and delay would cause her heavy financial loss, she is induced by Kaitlyn’s threat to make the contract.
. Kait has no RA, Threat is duress, voidable.
101
• Alexus, who has promised to Kaitlyn to vacate leased premises in return for 10,000 in order to permit Kaitlyn to demolish the building and construct another, refuses to do so unless Kaitlyn agrees to purchase her worthless furniture for 5,000. Kaitlyn can resort to regular eviction proceedings, but because this will materially delay her construction schedule and cause her heavy financial less, she is induced by Alexus threat to make the contract.
. No RA, threat is duress, and its voidable.
102
• Alexus, who has contracted to sell goods to Kaitlyn, makes an improper threat to refuse to deliver the goods to Kaitlyn unless Kaitlyn modifies the contract to increase the price. Kaitlyn attempts to buy substitute goods elsewhere but is unable to do so. Being in urgent need of the goods, she makes the modification.
No RA, threat is duress, voidable.
103
• Above, Kaitlyn could buy substitute goods elsewhere but does not attempt to do so.
The purchase of other goods is a reasonable alternative, not voidable.
104
• Alexus, who has contracted to pay for goods delivered by Kaitlyn, makes an improper threat to refuse to pay unless Kaitlyn modifies the contract to reduce the price. Kaitlyn cant borrow money elsewhere. Kaitlyn being in urgent need of cash to avoid foreclosure of a mortgage, she makes the modification.
Voidable
105
• Alexus, seeking to induce Kaitlyn to make a contract to ssell land to Alexus, threatens to poison Kaitlyn unless Kaitlyn makes the contract. The threat would not be taken seriously by a reasonable person, but Kaitlyn is easily frightened and attaches importance to the threat in deciding to make the contract.
It is voidable
106
• Alexus seeks to induce Kaitlyn, Alexus’s wife, who has a history of severe emotional disturbances, to sign a separation agreement on unfavorable terms. Kaitlyn has no lawyer, while Alexus does. Alexus tells Kaitlyn that if she does not sign the agreement, she will charge her will desertion, she will never see her children again and she will get back none of her personal property, which is in Alexus’s possession. Kaitlyn signs it.
. It is voidable.
107
• Alexus, who is not Anna’s agent, induces Kaitlyn by duress to contract with Anna to sell land to Anna. Anna, in good faith, promises to pay the agreed price.
The contract is not voidable.
108
• Above, Anna learns about the duress before promising to pay.
Voidable
109
• Alexus is a good faith purchaser of value of valuable painting stolen from Kaitlyn. When Kaitlyn demands the return of the painting, Alexus threatens to poison Kaitlyn unless she releases all rights to the painting for 1,000. Kaitlyn, having no reasonable alternative, is induced by Alexus’s threat to sign the release, and Alexus pays her 1,000.
The threatened at is both a crime and a tort, and the release is voidable.
110
• Alexus threatens Kaitlyn that she will kill Anna, an employee of Kaitlyn, unless Kaitlyn makes a contract to sell Alexus a tract of land that Kaitlyn owns, Kaitlyn having no RA is induced.
Threat is a crime and tort. Voidable
111
• Alexus, a pawnbroker, has possession of a valuable heirloom pledged by Kaitlyn. Kaitlyn offers to redeem the pledge, but Alexus threatens not to surrender it unless Kaitlyn signs a promissory note in compromise of another claim, the validity of which is in dispute.
Kaitlyn, having no RA, is induced. Threat is a tort. Voidable.
112
• Alexus, who believes that Kaitlyn, her employee, has embezzled money from her, threatens Kaitlyn that a criminal complaint will be filed, and she will be prosecuted immediately unless she executes a promissory note for 5,000 in satisfaction of Alexus’s claim. Kaitlyn, having no RA, is induced.
Note is voidable. Alexus, may, however, have a claim against Kaitlyn for restitution of any money embezzled.
113
• Alexus is the payee of a valid 5,000 promissory note executed by Kaitlyn for the repayment of money embezzled by Kaitlyn. Alexus makes a threat to Anna, a friend of Kaitlyn, that a criminal complaint will be filed, and Kaitlyn will be prosecuted immediately unless anna becomes a surety on the note in consideration of an extension of time for its payment. Anna is induced by Alexus’s threat to become a surety.
The suretyship is voidable by Anna.
114
• Alexus threatens to commence a civil action and file a lis pendens against a tract of land owned by Kaitlyn, unless Kaitlyn makes a contract to discharge a disputed claim that Kaitlyn has against Alexus. Alexus knows that the threatened action is without foundation. Kaitlyn, having no RA, is induced.
Since Alexus does not believe that there is a reasonable basis for the threatened process, her threat is made in bad faith. Alexus’s threat is improper, and the contract is voidable. However, if Alexus believes that there is a reasonable basis for the threatened process and if the proposed contract is not exorbitant, the threat is not improper, and the contract is not voidable.
115
• Alexus, who has a valid claim for damages against Kaitlyn, threatens to attach a shipment of perishable goods unless Kaitlyn makes a contract to sell a machine to Alexus. As Alexus knows, other non-perishable goods are available for attachment. Kaitlyn, having no RA, is induced.
. Since Alexus knows that they threatened attachment would involve a misuse of that process to force a settlement rather than to preserve assets, her threat is made in bad faith and is voidable.
116
• Alexus contract to excavate a caller for Kaitlyn at a stated price. Alexus unexpectedly encounters solid rock and threatens not to finish the excavation unless Kaitlyn modifies the contract to state a new price that is reasonable but is nine times the original price. Kaitlyn, having no RA, is induced.
Alexus’s threat is not a breach of her duty of good faith and fair dealing, and the modification are not voidable.
117
Alexus contract to excavate a cellar for Kaitlyn at a stated price. Alexus begins the excavation and then threatens not to finish it unless Kaitlyn makes a separate contract to excavate the cellar of another building. Kaitlyn, having no RA, is induced.
Alexus’s threat is a breach of her duty of good faith and fair dealing, and the proposed contract is voidable.
118
• Alexus contracts to sell part of a tract of land to Kaitlyn. Kaitlyn, solely to induce Alexus to discharge her from her contract duty on favorable terms, threatens to resell the land to a purchaser whose industrial use will have an undesirable effect on Alexus’s land, unless Alexus releases Kaitlyn in return for a stated sum. Alexus having no RA, is induced.
Kaitlyn’s threat is breach of duty of good faith. Modification is voidable.
119
• Alexus makes a threat to discharge Kaitlyn, her employee, unless Kaitlyn releases a claim that she has against Alexus. The employment agreement is terminable at the will of either party, so that the discharge would not be a breach by Alexus. Kaitlyn, having no RA, is induced.
Alexus’s threat is a breach of her duty, and the release is voidable.
120
• Alexus makes a threat to Kaitlyn, her former employee, that she will try to prevent Kaitlyn’s employment elsewhere unless Kaitlyn agrees to release a claim that she has against Alexus. Kaitlyn, having no RA, is induced.
If the court concludes that the attempt to prevent Kaitlyn’s employment elsewhere would harm Kaitlyn and would not significantly benefit Alexus, Alexus’s threat is improper, and the contract is voidable.
121
• Alexus, who has sold goods to Kaitlyn on several previous occasions, intentionally misleads Kaitlyn into thinking that she will supply the goods at the usual price and thereby causes Kaitlyn to delay in attempting to buy them elsewhere until it is too late to do so. Alexus then threatens not to sell the goods to Kaitlyn unless she agrees to pay a price greatly in excess of that charged previously. Kaitlyn, being in urgent need of the goods, makes the contract.
If the court concludes that the effectiveness of Alexus’s threat in inducing Kaitlyn to make the contract was significantly increased by Alexus’s prior unfair dealing. Alexus’s threat is improper, and the contract is voidable.
122
• The facts being otherwise as stated above, Alexus merely discovers that Kaitlyn is in great need of goods that they are in short supply but does not mislead Kaitlyn into thinking she will supply them.
. Not improper not voidable.
123
• Alexus operates a fur storage concession for customers of Kaitlyn’s store. Alexus becomes bankrupt and fails to pay Anna 1,000 for charges for storing furs of Kaitlyn’s customers. Anna makes a threat to Kaitlyn not to deliver the furs to Kaitlyn’s customers unless Kaitlyn makes a contract to pay Anna the 1,000 plus 2,000 that Alexus owes Anna for storage. Kaitlyn, afraid of offending its customers and having no RA, makes the contract.
. If the court concludes that Anna’s threat to Kaitlyn is a use for illegitimate ends of its power against Kaitlyn to retain the furs for the 1,000 owed for the storage, then threat is improper and voidable.
124
• Alexus, a municipal water company, seeking to induce Kaitlyn, a developer, to make a contract for the extension of water mains to her development at a price greatly in excess of that charged to those similarly situation, threatens to refuse to supply Kaitlyn unless Kaitlyn makes the contract. Kaitlyn, having no RA, makes the contract.
. Because the threat amounts to a use for illegitimate ends of Alexus’s power not to supply water, the contract is voidable.
125
• Alexus, who is not experienced in business, has for years been accustomed to relying in business matters on the advice of her friend, Kaitlyn, who is experienced in business. Kaitlyn constantly urges Alexus to make a contract to sell to Anna, Kaitlyn’s confederate, a tract of land at a price that is well below its fair value. Alexus is thereby induced to make the contract.
Even though Kaitlyn’s conduct does not amount to misrep, it amounts to undue influence because Alexus is justified in assuming that Kaitlyn will not act in a manner inconsistent with her welfare, and the contract is voidable.
126
• Alexus, an elderly and illiterate man, lives with and depends for her support on Kaitlyn, her niece. Kaitlyn tells Alexus that she will no longer support her unless Alexus makes a contract to sell Kaitlyn a tract of land. Alexus is thereby induced to make the proposed contract.
Even though Kaitlyn’s conduct does not amount to duress, it amounts to undue influence because Alexus is under the domination of Kaitlyn, and the contract is voidable by Alexus.
127
• Alexus, under guardianship by reason of mental illness, buys an old car from Kaitlyn for 300, giving a promissory note for the amount. Alexus subsequently abandons the car. Alexus is not liable on the note.
Kaitlyn may reclaim the car or, if the car is found to be a necessary, has a claim for having furnished it to Alexus.
128
• Shortly after commitment to a hospital for the insane and while still confined, Alexus conveys land to Kaitlyn, taking back a purchase-money mortgage. Subsequently Anna is appointed guardian of Alexus’s property. On Alexus’s behalf, Anna ratifies the conveyance and sues to enforce the mortgage by foreclosure
. Kaitlyn has no defense: since Alexus was not under guardianship, the conveyance and mortgage were voidable, not void.
129
• Alexus, a schoolteacher, is a member of a retirement plan and has elected a lower monthly benefit in order to provide a benefit to her husband if she dies first. At age 60 she suffers a nervous breakdown, takes a leave of absence, and is treated for cerebral arteriosclerosis. When the lease expires, she applies for retirement, revokes her previous election, and elects a larger annuity with no death benefit. In view of her reduced life expectancy, the change is foolhardy, and there are no other circumstances to explain the change. She fully understands the plan, but by reason of mental illness is unable to make a decision based on the prospect of her dying before her husband. The officers of the plan have reason to know of her condition. Two months after the changed election she dies
The change of election is voidable.
130
• Alexus, an incompetent not under guardianship, contracts to sell land to Kaitlyn, who does not know of the incompetency. Alexus continues to be incompetent. What happens when you discover Alexus is incompetent
On discovering the incompetency, Kaitlyn may refuse to perform until a guardian is appointed, and if none is appointed within a reasonable time may obtain a decree canceling the contract.
131
• Alexus, an incompetent not under guardianship, contracts to buy land for a fair price from Kaitlyn, who does not know of the incompetency. Shortly after transfer of title to Alexus and part payment by Alexus, Alexus dies
Alexus’s personal representative may recover Alexus’s part payment on reconveying the land to Kaitlyn.
132
• Above, Anna, with knowledge of Alexus’s incompetency, renders legal services to Alexus in the transaction; after learning of Alexus’s incompetency, Kaitlyn pays 500 to Anna pursuant to the contract.
Alexus’s personal representative need not reimburse Kaitlyn for the payment.
133
• Alexus, an incompetent spouse not under guardianship, mortgages land on fair terms to Kaitlyn, a bank which has no knowledge or reason to know of the incompetency for a loan of 2,000. At Alexus’s request the money is paid to the other spouse, Anna, who absconds with it.
. The contract is not voidable.
134
• Alexus, a congenital imbecile not under guardianship, has an interest in unimproved land which is contingent on her surviving her mother, Kaitlyn. Alexus joining Kaitlyn and Anna, a cousin, in leasing the land on fair terms for 25 years to Barbara, who has no reason to know of the incompetency. Subsequently Alexus assign her interest in the rent to Anna in return for Anna’s agreement to support Alexus for life, which Anna duly performs. Five years later Alexus joins Kaitlyn and Anna in an outright sale of the land to Barbara.
On Kaitlyn’s death avoidance of the sale of Alexus’s interest may be equitable if Barbara can be assured of repayment of the price and of retaining improvements made by her after the sale; avoidance of the lease would be inequitable.
135
• Alexus, an incompetent not under guardianship, lives on a homestead with her mother Kaitlyn and brother Anna. Alexus holds a mortgage on a second tract of land owned by Anna. To prevent foreclosure of a mortgage on the homestead, Alexus, Kaitlyn, and Anna join borrowing money from Barbara on a mortgage of both tracts on fair terms. Barbara acts in good faith but has reason to know Alexus’s incompetency. Alexus dies, leaving Kaitlyn her sole heir.
The mortgage to Barbara is not voidable for the benefit of Kaitlyn.
