Defenses Flashcards
Statute of Frauds - UCC sale of goods + merchants
To be enforceable, a contract for the sale of goods priced at $500 or more must be evidenced by a signed writing indicating that a contract has been made, specifying the quantity, and signed by the party to be charged. Any mark made with the intent to authenticate the writing is a signature, including a party’s initials or letterhead. However, between merchants, if one party sends the other party a written confirmation of their oral agreement that is sufficient to bind the sender, it will also bind the recipient if he has reason to know of its contents and does not object within 10 days of receipt.
Statute of Frauds exception - part performance under UCC
Part performance is sufficient to take a sale of goods contract out of the Statute of Frauds when: (i) the goods have been specially manufactured or (ii) the goods have been either paid for or accepted. Under the part performance doctrine, a contract is enforceable only to the extent of the partial payment or acceptance.
Unconscionability
Unconscionability is tested at the time a contract is formed. A contract will be found to be unconscionable where the court finds that the terms are extremely one-sided. Such contracts are often found where the parties are of unequal bargaining positions. Unconscionability usually arises where one of the parties has substantially superior bargaining power and can dictate the terms of the contract to the other party, who has inferior bargaining power.
Statute of Fraud - all contract types covered
Marriage Years (term of) Land Executory Goods ($500 or more) Surety (promise to pay the debt of another)
Main purpose rule exception to surety contracts under Statute of Frauds
Where the main purpose or leading object of the promisor/guarantor is to secure an advantage or pecuniary benefit for himself, the contract is not within the Statute of Frauds, even if the effect is still to pay the debt of another.
Statute of Frauds - general rule
Under the Statute of Frauds, certain agreements must be evidenced by a writing that contains: (i) the identity of the party sought to be charged; (ii) identification of the contract’s subject matter; (iii) the terms and conditions of the agreement; (iv) recital of consideration; and (v) signature of the party to be charged.
Mistake - unilateral
Generally, unilateral mistake will not prevent contract formation. However, when only one of the parties entering into a contract is mistaken about facts relating to the agreement, the nonmistaken party cannot snap up the offer if she knew or had reason to know of the mistake. If the nonmistaken party knew or had reason to know of the mistake made by the other party, the contract is voidable by the mistaken party.
Mutual mistake
If both parties are mutually mistaken about the terms of a contract and that mistake goes to the heart/essence of the agreement, it is grounds for rescission.
Exception to general rule about minors entering into contracts
Despite the general rule that minors lack the legal capacity to contract and will not be bound by contracts they make, they will be held liable in restitution for the benefits they receive under contracts they make for necessities.
Impossibility to perform
Contractual duties are discharged where it has become impossible to perform them. The occurrence of an unanticipated or extraordinary event may make contractual duties impossible to perform. If the nonoccurrence of the event was a basic assumption of the parties in making the contract, and neither party has assumed the risk of the event’s occurrence, duties under the contract may be discharged. If there is impossibility, each party is excused from duties that are yet to be performed. If either party has partially performed prior to the existence of facts resulting in impossibility, that party has a right to recover in quasi-contract (restitution) for the reasonable value of his performance. While that value is usually based on the benefit received by the defendant (unjust enrichment), it may also be based on the detriment suffered by the plaintiff (the reasonable value of the work performed).
Duress
A contract can be voided based on duress when a party’s assent to a contract is induced by an improper threat by the other party that leaves the victim no reasonable alternative. Withholding something someone wants or needs will constitute economic duress if: (i) the party threatens to commit a wrongful act that would seriously threaten the other contracting party’s property or finances; and (ii) there are no adequate means available to prevent the threatened loss.
Statute of Frauds - term of years
Under the Statute of Frauds, contracts that cannot by their terms be performed within a year are unenforceable unless they are evidence by a writing or writings signed by the party to be bound. At common law, the writing required must contain the contract’s essential terms, including the identity of the party to be charged and a description of the contract’s subject matter.
