Defenses

Question 1

Statute of Fraud Defenses

Answer 1

Rule = SOF requires a writing signed by the party to be charged (aka D) that evidences the contract

MY LEGS =

• M = contracts made is consideration of marriage
• Y = contracts that cannot be performed within a year
• L = contracts for the sale of land
• E = promises made by an executor to pay a debt from his own estate
• G = contracts for the sale of goods over $500
• S = surety contracts

Question 2

SOF Exceptions for Land —- where no writing is required

Answer 2

• Land: part performance aka when one’s actions evidence a contract —- B does 2/3 following:
  1. takes possession of property
  2. improves the land significantly; or
  3. pays a substantial amount of the purchase price

Question 3

SOF Exceptions for Sale of Goods —- where no writing is required

Answer 3

4 exceptions:

1. merchants confirmatory memo
2. when the seller has made a substantial beginning in manufacture or commitments for specially manufactured goods not suitable for sale to others in the seller’s ordinary course of business
3. judicial admission: one admits in his pleadings/testimony/in court that there is a contract —– it is enforceable up to the quantity permitted; and
4. part performance: one pays for or accepts a part of the contract

Question 4

SOF Exceptions for Surety —- where no writing is required

Answer 4

A promise to pay the debt of another if the other does not pay falls within the SOF UNLESS the main purpose of the surety promise is to serve a pecuniary interest of the person making the promise

Question 5

SOF Exceptions for 1 Year —- where no writing is required

Answer 5

Full performance on one side will serve as a substitute for a signed writing

Question 6

Incapacity

Answer 6

For minors, mentally incompetent, or intoxicated persons

-may be liable for necessities

Question 7

Duress

Answer 7

When a party threatens to commit a wrongful act that would threaten the other party’s finances, property, well-being, or life

Question 8

Undue Influence

Answer 8

Unfair persuasion where a person in a position of trust, confidence, or dominance uses that position to convince another to enter into a contract that is not in that party’s best interest

Question 9

Mutual Mistake

Answer 9

If both parties are mistaken about a basic assumption of fact that materially affects the agreed-upon exchange and neither bears the risk, the contract is VOIDABLE

Question 10

Unilateral Mistake

Answer 10

If a party knew or had reason to know of the other party’s mistake, the contract is VOIDABLE

Question 11

Mutual Misunderstanding

Answer 11

There is no contract if both parties have a different understanding of a material term that is open to at least 2 reasonable interpretations and neither party has any reason to know of the meaning attached by the other

Question 12

Illegal Subject Matter

Answer 12

Contract is VOID!!!!

If contract is for an illegal purpose, it is voidable by the party who didn’t have the illegal purpose if he didn’t know the purpose or knew of the purpose but didn’t facilitate it and doesn’t involve serious moral turpitude

Question 13

Unconscionability

Answer 13

2 elements:

1. procedural unconscionability = unfair bargaining process; and
2. substantive unconscionability = grossly unfair terms

VOIDABLE

Question 14

Other Defenses

Answer 14

Fraud, misrepresentation, nondisclosure, and public policy