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Aa. Contracts > Defenses > Flashcards

Defenses Flashcards

1
Q

i.music; list (6)

What are the defenses

A
  1. Incapacity
  2. Mutual assent, absence of (aka lack of offer + acceptance)
  3. Unconscionability
  4. SOF
  5. Illegality
  6. Consideration, absence of
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2
Q

voidable vs void

A

When a contract is voidable, a party to the contract is able to cancel or revoke the contract

A contract may be deemed void if the agreement is not enforceable as it was originally written

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3
Q

list (4)

What are the incapacity defenses

A
  1. Voluntary Intoxication
  2. Involuntary intoxication
  3. Mental incapacity
  4. Infancy/minority
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4
Q

incapacity defense

When is voluntary intoxication a defense

A

K is voidable (aka not enforceable) if other party had reason to know of intoxication

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5
Q

incapacity defense

When is voluntary intoxication not a defense

A

If there was “no reason to know” of intoxication then the K is NOT voidable aka the K is enforceable

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6
Q

incapacity defense

When is involuntary intoxication a defense

A

K voidable if person could not understand nature or significance of agreement when entered;

treated like mental incapacity

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7
Q

incapacity defense

When is mental incapacity a defense

A

Person so mentally deficient they cannot understand nature or significance of agreement when they entered it

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8
Q

incapacity defense, list (2)

Mental incapacity can void a K when:

A
  1. A previously incapacitated person can void/disaffirm a K when lucid or
  2. Void a K through use of a legal represenative
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9
Q

incapacity defense

When is infancy/minority a defense

A

when minor makes a K, minor can void the K

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10
Q

incapacity defense; list (2)

When can a minor affirm or void a K

A
  1. By conduct
  2. Before turning 18 or ~6mo after turning 18
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11
Q

AMA; list (3)

Types of “absence of mutual assent”

A
  1. Misunderstanding
  2. Misrepresentation
  3. Mistake
    1. unilateral mistake
    2. mutual mistake
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12
Q

AMA

When is misunderstanding a defense

A

If K includes a term with at least two possible meanings

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13
Q

AMA; list (3) - misunderstanding

If K language is ambiguous, K formed/not formed depending on awareness.

What are the levels of awareness and is K formed?

A
  1. Neither party aware - NO K unless both parties intended same meaning
  2. Both parties aware - NO K unless both parties intended same meaning
  3. One party aware - binding on what ignorant party reasonably believed to be the meaning of the ambiguous words
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14
Q

AMA; list (3)

Mutual mistake makes a K void if:

remember - void means unenforceable from the start

A
  1. mistake concerns a basic assumption on which K is made
  2. mistake has a material effect -AND-
  3. adversely affected party (and thus, the party seeking avoidance) did not assume the risk of the mistake
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15
Q

AMA

Unilateral mistake is voidable** when

remember - voidable means one or both parties can avoid

A

Nonmistaken party knew or had reason to know about mistake, then mistaken party (party who did not know of the mistake and acted upon K) can void

iow: the unilateral mistake will not prevent formation of the contract _unless_ the nonmistaken party knew or had reason to know of the mistake

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16
Q

AMA

Unilateral mistake is NOT voidable when

(aka K is enforceable/can have a case for breach of K)

A

when nonmistaken party DID NOT have reason to know of the mistake

which means that the mistaken party will be liable on the K and cannot void it

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17
Q

AMA; list (2)

Types of misrepresentation

A
  1. fraudulent misrepresentation
  2. material misrepresentation
18
Q

fraudulent misrepresentation - what happens to K?

A

K is voidable by innocent party if the justifiably relied on the fraud

19
Q

material misrepresentation

A

K is voidable by innocent party if the justifiably relied on misrepresentation AND misrep was material

20
Q

list (2)

A misrepresentation is material if

A
  1. induces a reasonable person to agree -OR-
  2. maker knows that a particular person would agree (because of some special circumstance) even if a reasonable person would not
21
Q

SOF

A

Certain agreements (MYLEGS) - by statute - need to be in writing AND signed to be enforceable

22
Q

who needs to have signed the K under SOF

A

party being sued

23
Q

MYLEGS

A

M - marriage

Y - performance that cannot be performed in one year

L - interest in land

E - Executor (or administrator)

G - Goods over $500

S - surety

24
Q

Marriage

A

a promise where the consideration given is marriage

25
Q

Year

A

a promise that cannot be completed within one year

26
Q

when does time period start for “Year” Ks

A

date of agreement NOT date of performance

27
Q

list (5)

Land

A

promise creating an interest in land, which includes

  1. leases from more than one year
  2. easements for more than one year
  3. mortgages and most other security liens
  4. fixtures
  5. minerals or structures if they are severed by buyer
28
Q

Equal Dignity Rule

A

Granting authority to a 3rd party to enter into a K on behalf of someone else only needs to be in writing IF the subject of the K falls under SOF

ex: Billy alleges Nas orally agreed to seel Ranch for $4m. Nas authorizes an agent to sell the ranch. Must authorization be in writing? YES b/c underlying subject is the sale of land which is an SOF issue

29
Q

ist (2)

what does NOT create interest in land

A
  1. Ks to build
  2. Ks to find a buyer for a seller
30
Q

Executor

A

promise by executor or administrator to pay estate’s debts from their own funds

31
Q

Goods

A

K for sale of goods $500 or more

32
Q

Signature for Goods - what to consider

A
  1. who has signed? is it party being sued?
  2. if not, is it a merchant’s confirmatory memo? (merchant sends signed writing to another merchant to memorialize their oral agreement → other merchant can deny within certain time frame otherwise, writing becomes enforceable)
  3. If neither of the above, the writing NOT enforceable
33
Q

SWAP; list (4)

Goods $500 and over that can be enforced without a signed writing

A
  1. Specially made goods
  2. Written confirmation by a merchant to an oral agreement - merchant’s confirmatory memo
  3. Admission in court
  4. Performance
34
Q

Surety

A

a promise to relieve the debts of another IF offered as collateral to that person’s promise to pay.

Example

  • collateral promise- give him the goods, if he does not pay, I will;*
  • signed writing needed*

primary promise - give him the goods and i will pay; no signed writing needed

35
Q

Key phrase for suretyship to apply

A

“If he doesnt pay, I will pay”

36
Q

Main purpose doctrine

(as it applies to surety)

A

main purpose to relieve debt - writing is needed

main purpose guarantee completion of an agreement - writing is not necessary

37
Q

if the writing does meet SOF requirements, then

A

the party being sued can raise it as a defense for lack of a sufficient writing thus rendering the K unenforceable

38
Q

if a written K is modified orally and the contract as modified falls within SOF, then

A

the modified K must be in writing to be enforceable

39
Q

Under CL, what happens if there is oral modification if a written K expressly provides that it can only be modified by a writing

A

oral modification will be enforceable!

40
Q

Under UCC, what happens if there is a provision that says K may only be modified or rescinded by a signed writing?

if it is btwn a merchant and a nonmerchant?

A

the provision is respected and signed writing will be required

separate signature of nonmerchant will be required

41
Q

what happens if parties try to orally modify a K that requires written modification?

A

will be ineffective as modification but can be considered a waiver

Aa. Contracts (9 decks)

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