Contractual Defenses Flashcards
Duress
A contract is voidable when it is established that a party’s manifestation of assent is induced by an improper threat that leaves the party no reasonable alternative
Incapacity (minors)
A party must have capacity to enter into a contract . Minors (under 18) generally lack capacity per se.
Incapacity (intoxication)
Intoxicated persons receive protection only if the other side had reason to know of their intoxication.
Effect of lack of capacity
If a party to a contract lacks capacity, the contract is voidable. Except if the contract involves the purchase of necessaries, the party lacking capacity must still pay fair market value for the necessaries.
How can you ratify lack of capacity
By keeping the benefits of the contract after capacity is obtained.
Mutual Mistake
A mutual mistake occurs when both parties are mistaken as to basic assumption on which the agreement is made.
When can you rescind the deal on Mutual mistake.
- There is a mistake of fact
- the mistake relates to a basic assumption of the contract
- the mistake has a material impact on the deal
- the impacted party did NOT assume the risk of the mistake .
Unilateral mistake
A unilateral mistake is a mistake made by one party that is unknown to the other party.
Misrepresentation
A misrepresentation is a statement at the time of contracting that is not true. It can be intentional or accidental.
To assert misrepresentation defense what must the party show ?
- Present fact (not opinion)
- Material or fraudulent (knowinglu reckless_
AND
- That is made under circumstances in which it is justifiable to rely on the representation.
Undue influence
Arises when a party’s assent is induced due to his susceptibility to pressure and the other side excessive use of pressure (usually voidable).
Illegality
If the consideration of performance of a contract is illegal or contrary to t public policy, the contract is void and will not be enforced. However, a legal contract entered in furtherance of an illegal purpose may still be enforced.
Unconscionability
If a contract is so unfair or oppresive to one party such that it shocks the conscience of a the court, a court may find in unconscionable and refuse to enforce it.
Breach of express warranty
Ucc: Under art 2, affirmation of fact relating to the goods that are part of the basis of the bargain create express warranties that the goods will conform to those affirmations and descriptions. This warranty is breached if the do not conform.