Defenses Flashcards
Stees v. Leonard
(Mud Building)
Builder reasonably knew the risks, but did not plan for it in the contract. So impossibility is not a defense.
Taylor v. Caldwell
(Music Hall)
- The party must perform an unqualified promise even though performance is more burdensome than expected.
- if performance becomes impossible by the perishing of the thing, without fault, then the party is released from the promise.
R 261 - Supervening Impractability
If the occurrence or nonoccurrence of an event on which a basic assumption of the contract is made, a party may be released.
IOW: there was a basic assumption the event would not occur.
Force Majure Clause
a list of events that would excuse a party from performing due to impractability
Mistake
Belief not in accordance with the facts that:
- has a material effect
- and was a basic assumption on which the contract was made
Grieved party is released unless they bear the risk
Mutual Mistake
Both parties mistaken
Unilateral Mistake
One party mistaken and
(a) enforcement would be unconscionable OR
(b) the other party had reason to know of the mistake and did not alert them to it.
Bears the risk
- risk is allocated to him per the agreement
- they were aware of their limited knowledge and treated it as sufficient
Sherwood v. Walker
(Cow Case)
Rose of Aberlone
the mistake of the parties “went to the whole substance of the agreement” as to what was being sold
Lenawee Party
Anderson v. Omeara
(Dredge Case)
No mutual mistake because the seller was aware of the dredge’s capabilities.
There was a unilateral mistake, but the plaintiff bore the risk because he had a lack of knowledge he considered efficient.
Promises of the parties are generally dependent
Constructive Conditions
R 234
- If party exchange can be done simultaneously, it is due simultaneously.
- If one party performance takes a period of time, his is due early
Jacobs and Young v. Kent
If a party substantially performs, insignificant deviations are not forfeiture
In this case, the differences in value are the appropriate damages
OW Grun Roofing
if the deficiency in the contractor’s performance is so pervasive that it frustrates the purpose of the contract, substantial performance does not apply
Perfect Tender Rule - UCC
Buyer can reject goods for any imperfection
2-508
Buyer can cure imperfect tender if there is time left
Fanok v. Canover Boat
(burning boat)
Rejection for perfect tender must be made in reasonable time
Duty of good faith
exactly what it sounds like
- most applicable in satisfaction clauses
Wood v. Lucy Lady Duff
Bloor v. Falstaff
Unconscionability
When no one defense fully applies but the contract is unjust
- most courts require both procedural and substantive uncon.
William v walker thomas
(furniture)
furniture payments
Procedural Unconscionability
Absence of meaningful choice
- bargaining power
- ability to understand contract
- fine print
- deception
Substantive Unconscionability
unreasonably unfavorable terms
- fairness
- one sidedness
Federal Arbitration Act
You can hardly raise uncon. unless about the arbitration clause itself
contracts of adhesion
“take it or leave it”
procedural unconscionability
Modification
typically require fresh consideration
- softened by UCC and R2
in any modification case you can try to argue duress
Alaska Packers
If parties enter a new agreement under which one party agrees to do no more than he was already obligated to do under an existing contract, the new agreement is unenforceable for lack of consideration.
Standard Finance v. Ellis
Austin Instruments
“give us more money or we will not perform”
- there are cases where this is theoretically appropriate.
Economic Duress
a threat not to perform under a contract, as in this case, or a threat not to do business any more
Duress (General)
improper threat that leaves a party with no reasonable alternative
not all threats are improper
Odorizzi v. Bloomfield School District
P was pressured into resigning without lawyers in his own home by his boss
- Undue Influence
Undue Influence
One person is overcoming anothers will without convincing their judgement
-
Hank v Powder Hills
Exculpatory clause that protects liability for one’s own negligence is against public policy
R 195
Basically Powder Hills ruling
Valley Medical
Noncompetes violate public policy if they do not protect a legitimate business interest
Misrepresentation
assent is induced by either a fraudulent or a material misrepresentation by opposing or third party
Fraudulent Misrepresentation
- knows an assertion is not in accordance of the facts
- does not have the confidence or basis that he states
Material Misrepresentation
if it would be likely to induce a reasonable person to manifest his assent, or if the maker knows that it would be likely to induce the recipient to do so
Misrepresentation through Concealment
Action intended or known to be likely to prevent another from learning a fact is equivalent to an assertion that the fact does not exist.
Misrepresentation through Non-Disclosure
(a) where he knows that disclosure of the fact is necessary to prevent some previous assertion from being a misrepresentation
(b) where he knows that disclosure of the fact would correct a mistake of the other party as to a basic assumption
(c) where he knows that disclosure of the fact would correct a mistake of the other party as to the contents or effect of a writing,
d) where the other person is entitled to know the fact because of a relation of trust and confidence between them.
Reed v. King
(murder house)
Not letting P know that murders occurred in the house, which depreciated the value, is non-disclosure
Stambovsky
(ghost)
Pretty narrow rule: their conduct created a duty to disclose the ghost
Laidlaw v. Oregon
ANDREW JACKSON WOOWOO
Obde
(termites)
Termites
Parties to a transaction have a duty to disclose material facts whenever justice, equity, and fair dealing demand
LN Grove v. Chapman
(Disney)
Disney
both parties were speculating, and that’s not a misrepresentation.
Statute of Frauds
Requires some contracts to be in writing
MYLEGS
MYLEGS
Marriage
Year
Land
Executor
Goods (500 or more)
Surety
For our purposes, the important ones are sale of land, 1 year provision, and UCC sale of goods
