Defenses Flashcards
When does mutual mistake as to an existing fact make a K voidable to the adversely affected party?
(1) The mistake concerns a basic assumption on which the K was made
(2) The mistake had a material effect on the agreement
(3) Neither party assumed the risk of the mistake
When does partial performance take a K for the sale of goods over $500 out of the Statute of Frauds?
When the goods were specially manufactured OR when goods have been paid for or accepted.
What is the “main purpose” exception to the Statute of Frauds?
If the main purpose of the promisor in a Surety promise is to benefit their own pecuniary interest, the Statute does not apply.
What is the Merchant Confirmatory Memo Rule?
In a K between merchants, one party can satisfy the SoF by sending the other party a written confirmation of an oral agreement when …
(1) the memo is sent within a reasonable time after the oral agreement was made
(2) the memo is sufficient to bind the other party under the SoF
(3) the recipient has reason to know of the memo’s content
(4) the recipient does not object to the writing within 10 days of receipt
When do parties waive the requirement that a K must be modified in writing if the modified writing comes under the SoF?
(1) Both parties agree to an oral modification AND
(2) One party changes position in reliance on the oral modification
When does a unilateral mistake prevent contract formation?
When the non-mistaken party knew or had reason to know of the mistake (mistake was palpable or obvious), mistake had a material effect on the agreement, and neither party assumed the risk of the mistake
When does a misunderstanding prevent contract formation?
When a term is ambiguous (has multiple possible reasonable meanings), both parties intended different meanings, and neither or both parties were aware of the misunderstanding.
When does misunderstanding NOT prevent contract formation?
When one party was aware of the misunderstanding and the other was not, there is a K based on the ignorant party’s reasonable belief as to the meaning of the ambiguous term.
When is a K voidable based on misrepresentation?
When the innocent party justifiably relied on the misrepresentation, and the misrepresentation was material.
Justified reliance = reasonable reliance under the circumstances
Material = would induce a reasonable person to enter into the K, or the misrepresenting party knew that it would induce the innocent party for some special reason.
When is a promise that cannot be performed within one year of a K removed from the Statute of Frauds?
When there has been full performance by either party.
What must be shown for a party to enforce an oral agreement for the sale of specially manufactured goods over $500?
The goods are unsuitable for sale to anyone but the buyer, AND
1) The seller made a substantial beginning in manufacturing the goods or
2) Made a commitment for the purchase of the goods before repudiation was received
What are the requirements for a writing under the Statute of Frauds?
The writing must be signed by the party to be bound and
1) Identify the parties to the contract
2) Identify the subject matter of the contract
3) State the essential terms with reasonable certainty
When is a contract voidable based on duress?
When a party’s agreement to the contract was procured by an improper threat.
What are the elements of economic duress?
(1) A party threatens to commit a wrongful act that would seriously threaten the other party’s property or financial interests, and (2) there are no adequate means to prevent the threatened loss.
What are the elements of undue influence?
(1) Undue susceptibility to influence by one party and (2) excessive pressure by that party.
