defenses

Question 1

Ortelere v teachers retirement board of new york (incompetence) - P was a teacher that suffered a mental breakdown and went on leave, diagnosed with a mental illness and later died. Years before her death she had executed a selection of benefits under option one and name her husband as a beneficiary, she then changed her mind and made it to where when she died the payments would stop and her husband would get nothing; husband claims that she was not mentally competent to execute that; issue of whether an otherwise irrevocable election can be avoided due to incapacity because of a known mental illness.

Answer 1

Rule: via the restatement section 18, a contract can be declared void if a person by reason of mental illness or defect he is unable to act in a reasonable manner in relation to the transaction AND the other person has reason to know of his condition

Question 2

Webster street partnership v sheridan (infancy) - P entered into a lease with D and his friend both of which were 18 and 17 respectively but at the time of the lease they were both minors and P knew this; the two defendants did not pay rent one month and P told them that if they didn’t pay they would be evicted; both ds moved out and P’s attorney made a written demand to D for damages, and D’s attorney demanded a return of the security deposit; issue of whether the lease was voidable on account of the D’s infancy

Answer 2

Rule: one who enters into a k when he is a minor is not bound by that k if he latter disaffirms it

Question 3

what is the incompencty two element test

Answer 3

a contract can be declared void if a person by reason of mental illness or defect he is unable to act in a reasonable manner in relation to the transaction AND the other person has reason to know of his condition

Question 4

what is the exception to the infancy defense rule

Answer 4

if it can be proven that the k was for a necessity for the infant, they will be liable despite their age

Question 5

what is the defense of misrepresentation

Answer 5

the argument that a prty has been induced to give consent by improper means

Question 6

can innoncent misrepresentations warrant fraud and thus provide a defense

Answer 6

yes, as long as the misrep is based on material facts central to the conduct and its likely that a reasonble person would rely on it to enter into a k

Question 7

what are the elements of innocent misrepresntation that would provide a defense 4

Answer 7

must be a material fact

must be a reasonable reliance on that fact/incurred a loss

must be central to the agreement

it would be inequitable to otherwise not provide the defense

Question 8

Halbert v Rosenthal (termite case) - parties entered into a real estate agreement where P agreed to convey a house to D, D paid deposit; a termite inspection was made on the house and it was discovered that the house had a termite problem and d said they were no longer interested; p sued for specific performance and d alleged that P intentionally misrepresented the house as being termite free; issue of whether an innocent misrepresentation of a material fact warrant the granting of a claim for recession

Answer 8

Rule: it does not matter that a misrepresentation is innocent, as long as it is material and becomes likely to affect the conduct of a reasonable man with reference to a transaction with another person

Rule- a party may rescind a contract due to an innocent, negligent, or fraudulent material misrepresentation

Question 9

Vokes v arthur murray – the case with the divorcee taking all those dance classes; she kept taking classes and signing more contracts and spending money because the owners were falsely giving their opinion that she was getting better; issue of whether the Ks can be rescinded for fraud and misrepresentations if they were opinions

Answer 9

Rule- a statement of opinion may be actionable as misrepresentation where the party stating his opinion possess superior knowledge of the truth or falsity of the statement

Question 10

Byers v federal land co - p entered into a written k to purchase land from d, agents of d told p in preliminary negotiations that the land was worth 35 dollars an acre, which p relied on as they had not seen the land before the agreement; it was later discover that i was only worth 15 dollars per acre; the P alleged that d had fraudulently induced him by falsely misrepresenting that d was the actual owner of the land and that it was worth 35 dollars an acre issue over if there were any material facts that were misrepresentations that P relied on in entering the K that would make the K voidable

Answer 10

Rule: to cancel a contract for fraud, the P must show not just that d made a misrepresentation, but that it was a FACT and not an opinion, and that fact was also material to the transaction

Question 11

when is a misrep fraudulent

Answer 11

they know or belive that the assertion is not ture

when they dont have confidence that its true

when they know they dont have the bassi to make the assertion

Question 11

when is a misrep material

Answer 11

when it would be likely to induce a reasonble person to manifest his assent, or if the maker knows it would be likely to induce the recipent to do so

Question 11

Hackley v Headly - p contracted with d to cut and deliver logs and deliver them to d. When p attempted to collect his payment, d said he didn’t owe as much as P claimed he did, and P was forced to just take what d was willing to give, p ends up suing to recover the remaining amount owed; issue of whether a party is acting under economic duress when it accepts an amount less than is owed due to the party’s own financial condition

Answer 11

Rule- a contract is voidable on the grounds of duress when its established that the party making the claim was forced to agree to it by means of a wrongful threat precluding the exercise of free will

Question 11

when does a misreptresntation make a k voidable

Answer 11

when its fruadulent and or material

Question 12

Austin instrument v Loral corp – the one with Loral contracted with the Navy to produce radar sets on a scheduled delivery (ie a time crunch) and they went to the austin and made a k with them for austin to supply them with parts; austin wanted a price increase and said they would cease delivery if they didn’t get it; and they proceed to cease delivery, forcing loral to go to a higher, more expensive company to keep with the navy time line; issue of whether as a matter of law, was there a claim for economic duress

Answer 12

rule:A contract is voidable on the ground of economic duress if it is established that the party making the claim was forced to agree to the contract by means of a wrongful threat precluding the exercise of his free will.

Question 13

what is economic duress

Answer 13

When a party takes unfair advantage of changed economic circumstances, which give the other party no practical alternative but to give into demands to modify the contract

Question 14

when is reliance on opinion justifed by the recipiat (factors, so not all are needed) (3)

Answer 14

1. when they trust and have a special confidence in the other person
2. if they reasonbly beivle that persons skills im the subject matter make the opinion mean more
3. any other special reason sussupitble to a misrep of the type involved

Question 15

Odorizzi v bloomfield school district (the gay teacher one; undue influence ) - teacher was arrested for homsexual activity, question and held by the cops for a long time, when he got home the superintendent and principle forced him to resign and said if he didnt they would publicize his arrest, a month later the criminal charges were dropped and he wanted to go back to work but he was denied; issue of whether teacher had a cause of action to rescind the resignation under the argument of undue influence

Answer 15

Rule: where a dominant party to a transaction uses excessive pressure to persuade a party whose weakened mental state makes him especially susceptible to persuasion, the weaker party may rescind the agreement as obtained by undue influence

Question 16

Williams v walker-thomas furniture co (unconscionability; the rent a center case)- the furniture store had a provision that it would retain the title on the items until the customer paid it off, and every time a new item was leased by a customer a balance would become dut on all items; which meant if a customer defaulted on one purchase the furniture store could take back all the items; the d defaulted on a payment for a radio and the furniture won summary judgment to retain ownership; issue over whether the terms of the agreement were unconscionable

Answer 16

Rule: When an element of unconscionability is present at the time of contract formation, the resulting contract is not enforceable.

Question 17

what are the facotrs courts comsider when determining if a party was subject to over persuasion 7

Answer 17

Discussion of the transaction at an unusual or inappropriate time

Consummation of the translation in an unusual place

Insistent demand that the business be finished at once

Extreme emphasis on untoward consequences of delty

The use of multiple persuaders y the dominant side against a single servient party

Absence of a third pary adiser to the servient party

Statements that there is no time to consult financial adiviors or attorneys

Question 18

what are the elements of mutual mistake 4

Answer 18

the mistake was of a material fact

it was mutual

it was made at the time of the formation

it materially affects the agreement

Question 19

sherwood v walker - the barren cow case; issue of Whether a contract made based on a mutual mistake of the parties involving a material fact may be rescinded when the parties learn of the mistake.

Answer 19

When a contract is made based on the mutual mistake of the parties that relates to a material fact such as the subject matter of the sale, the price, or some other fact which materially affects the agreement, the parties may rescind the contract once they learn of the mistake.

Question 20

nester v michigan land and iron - the log case where the parties agreed to buy and sell all the lumber fit for saw logs on land owned by the defendnat, P without D’s consent cut all the lumber; issue of wheter a contract unenforceable for mistake when, considering all the circumstances, it is clear that the parties had every opportunity to fairly and equitably consider all terms of the agreement?

Answer 20

A contract is not unenforceable for mistake when, considering all the circumstances, it is clear that the parties had every opportunity to fairly and equitably consider all terms of the agreement.

Question 21

wood v boynton - the mistake of an expensive stome for a cheap one, p sold it for a dollar and later learned it was worth more, and the seller didnt know its worth either, issue of whether a party can rescind a contract for the sale of a good when she cant establish fraud or mistake?

Answer 21

A party may rescind a contract for the sale of a good if she can establish either fraud or mistake.

Question 22

Tyra v cheney- P was a subcontractor and wanted to make a verbal bid to work the D, P gave the wrong bid amount by accidently leaving out an item that was worth about 1000 dollars; the bid was accepted and when the work was done P tried to get paid the 1000 asserting he had made a mistake but D denied ever getting the oral bid; issue of whether P can recover full payment if D knew of the unilateral mistake made by the P

Answer 22

rule : a party who knows or has reason to know the other party made a mistake is not justified in relying on that mistake, because that would be acting in bad faith

Rule- two parties cant enter into a binding agreement when one party is aware of and seeks to take advantage of the other party’s mistake with regard to the contract

Question 23

Laidlaw v organ(duty to disclose) - the parties were negotiating for the sale of tobacco, D asked P if there was any reason he knew of that would make the market price of tobacco change, P said he didn’t, but he actually did know about something ie the war ending; the sale was completed and the tobacco was delivered; however, when D heard the news of the war ending, he stole the tobacco back; issue of whether the intelligence of extrinsic circumstances, which may influence the price of the commodity and which was exclusively within the knowledge of the vendee, should have been communicated to the vendor

Answer 23

Rule: Where the means of intelligence about extrinsic information is equally accessible to both parties to a contract, the knowing party does not have a duty to disclose the information to the other party, but at the same time, the knowing party may not say or do anything to mislead the other party.

Question 24

Drenan v star paving– were weren’t given much facts, but the P was preparing a bid for a project and d contacted them and submitted a bid for about 7k; this was the lowest bid and P relied on in giving the bid to D; d told P it had actually made a mistake and it could only do the work for 15k; P had to go to someone else and ended up having to pay 10k; p wanted damages; issue of Whether detrimental reliance by one party on another party’s offer, without formal acceptance of the offer, is sufficient to make the offer irrevocable.

Answer 24

Rule : An offer which the offeror should reasonably expect to induce definite and substantial reliance by the offeree, and which does induce such reliance is binding on the offeror and enforceable even without consideration if enforcement is necessary to prevent injustice to the offeree.

Question 25

Taylor v caldwell (the music hall case that you got cold called on when you were sick LMAO; impossibility) - the d owned a music hall and agreed to rent it out to P, after the k was formed but before the performance, the music hall burned down, p sued for damages for the money spent advertising and preparing for the concert; issue of whether the loss which the P sustained should fall on the d, or if the d should be excused via impossibility

Answer 25

Rule: when the performance depends on the continued existence of a given person or thing, a condition is implied that the impossibly of performance arising from the perishing of the person or thing shall excuse the performance

Question 26

Transatlantic financing corp v united states - the us charted p to transport a shipment; the charter did not indicate a route but it departed on a course that would have taken it through the suez canal; israel invaded and the canal was closed so P had to sail around; p brought suit for additional compensation; issue of whether the sudden change of circumstances requiring an adjustment of route or method render performance impossible

Answer 26

Rule: An unexpected contingency that requires an adjustment of method or route will not, by itself, render performance of a contract legally impossible, you need all three elements

Question 27

Krell v henry (frustration of purpose) the king coronation case; the parties agreed to lease/rent out a balcony that had a street view for the king’s coronation, and the renter put down money, but the king got sick and the coronation was canceled , d refused to pay the rest because the coronation was a condition precedent and he also wanted his money back; issue of whether the lack of the condition precedent frustrated the purpose of the agreement

Answer 27

Rule: when the substance of the contract is frustrated by circumstances, performance is excused by both parties

Question 28

Lloyd v Murphy(the car dealership case) the parties contracted for d to use the land only for selling cars; after they entered the agreement the government restricted the sale of new cars, p waived the restriction and said d could use the land for anything but d decided to leave and broke the lease, and P sued for the rent that the other party didnt pay; issue of whether a party’s performance under a lease be excused for frustration of performance when the frustrating event was reasonably foreseeable and the value of the lease has not been totally destroyed?

Answer 28

Rule: A party’s performance under a lease can only be excused for frustration of performance when the frustrating event was not reasonably foreseeable and the value of the lease is totally destroyed.

Question 29

what are the three elements of impossibility

Answer 29

1. Something unexpected must have occurred
2. The risk of the unexpected occurrence must not have been allocated either by agreement or by custom
3. The occurrence must have rendered performance commercially impractical

Question 30

difference btwn impossbile and impractical

Answer 30

A thing is impossible in legal contemplation when it is not practicable , and a thig is impractical when it can only be done at an excessive and unreasonable cost