Defenses

Question 1

SOF rs 101

Answer 1

The following classes of contracts are subject to a statute, SOF, forbidding enforcement unless there is a written memorandum or an applicable exception

Question 2

What’s covered under spam log? 101

Answer 2

SPAMLOG (What contracts are within the statute’s application?)
• Securities, personal property over $5k except goods, answer for debt of another (surety), marriage, land, cannot be executable over one year, goods over ($500)

Question 3

writing required for sof

Answer 3

Even if facts are true and the agreement was made, these contracts won’t be enforceable if not in writing
If a writing is required, then the contract is within the statute of frauds
Their significance and importance means there must be solid evidence of what was intended to be in the contract and what wasn’t
Written form makes “say-so” evidence inadmissible – cannot rely simply on what one party says what happened

Question 4

Purpose

Answer 4

The purpose of the SOF is to prevent fraud and perjury by person who might falsely claim that a contract was made when it was not

Question 5

Rs 130

Answer 5

(2) R2oC § 130: Regarding O – ask the question: Can this contract be fulfilled w/in one year? If it cannot, then the contract is within the SoF until one party fulfills their performance. When one party fulfills their performance, then the SoF no longer prevents enforcement of the contract. (IF you perform your part, its evidence that there isn’t fraud there. So you don’t need a writing if there evidence that there isn’t fraud)
• 130: Contract not to be performed within a year
• Where any promise in a contract cannot be performed within a year form the time the contract is made, all promises in the contract are within the SOF until one party to the contract completes his performance

Question 6

Questions to ask in SOF case

Answer 6

(1) Is the agreement within the Statute? (SPAMLOG)
Can this contract be fulfilled w/in one year
Is the agreement evidenced by a writing?
(4) Is there an exception?

Question 7

RS 131: Requirements of a Memorandum

Answer 7

RS 131: Requirements of a Memorandum
• Signed by or on behalf of the party to be charged
• Reasonably IDs the subject matter of the contract
• Sufficiently indicates that a contract has been made.
• States w/ reasonable certainty the essential terms of the unperformed promises in the contract.

Question 8

Sof Exceptions?

129

Answer 8

(RS 129: PE, specially made goods, admitted to contract)

4. Acting in reliance: reasonable reliance and continued assent has so changed his position that injustice can be avoided only by specific enforcement
5. Once the contract has been fully performed on one side, it will be enforceable

Question 9

Boone v Coe

Answer 9

The contract is unenforceable under the statute of frauds, since the contract for land had to be in writing to be enforced, and plaintiff cannot recover for the expenses they spent during the move because the defendant never received a benefit from their actions that would create an obligation to pay (promissory estoppel)

Question 10

Schwedes v Romain

Answer 10

The plaintiffs may have applied for financing and prepared to purchase the home under the advice of the defendant’s lawyer, but these were actions in contemplation of a contract, not partial performance of the contract, since there were many things that remained, and a final agreement should have been in writing and signed in order to be enforced.

Question 11

139 – Reliance on SOF

Answer 11

Enforcement by virtue of action in reliance
• A promise which the promisor should reasonably expect to induce action or forbearance on party of the promisee or third person and which does induce action is enforceable notwithstanding SOF if injustice can be avoided only by enforcement of the promise. The remedy granted by breach is to be limited as justice requires
• In determining whether injustice can be avoided by enforcement, the following circumstances are significant
• Other remedies, definite and substantial character of the action, evidence of the making and terms of the promise, reasonableness of the action, extent to which the action was foreseeable

Question 12

Arguing against reliance on promise

Answer 12

Not reasonable to rely on such promise (only $5, informal environment
The person did not actually rely on it (he was going to be stripping/working out anyways)
There is no injustice here (Working out is a good thing. He’s going to get fit anyways)

Question 13

In realnetworks

Answer 13

Electronic signatures/agreements are considered to be writing

Question 14

12. Capacity to Contract

Answer 14

(1) No one can be bound by contract who has not legal capacity to incur at least voidable contractual duties. Capacity to contract may be partial and its existence in respect of a particular transaction may depend upon the nature of the transaction upon other circumstances

Question 15

12 People who cannot manifest intent

Answer 15

(2)	A natural person who manifests assent to a transaction has full legal capacity to incur contractual duties thereby unless he is 
A.	Under guardianship, or 
B.	An infant, or
C.	Mentally ill or defective, or
D.	Intoxicated

Question 16

15. Incompetence

Answer 16

1. A person incurs only voidable contractual duties by entering into a transaction if, by reason of mental illness or defect,
   a. He is unable to understand in a reasonable manner the nature and consequences of the transaction, or
   b. He is unable to act in a reasonable manner in relation to the transaction and the other party has reason to know of his condition

Question 17

incompetence where a contract is made and the other party is without knowledge,

Answer 17

2. Where the contract is (1) made on fair terms and (2) the other party is without knowledge of the mental illness or defect, the power of avoidance under subsection 1 terminates to the extent that the contract has been so performed in whole or in part or the circumstances have so changed that avoidance would be unjust. In such a case a court may grant relief as justice requires.

Question 18

Elements of Incompetence

Answer 18

i. Age, bodily infirmity or disease, use of alcohol or drugs, and illiteracy may bolster evidence for incompetency.

Question 19

Ortelere v. Teacher’s Board

Answer 19

Even if the decedent appeared rational, her psychosis had rendered her unable to even work and so it could not be assumed that it would allow her to make sound contractual decisions.
• Board of Education knew of her condition and should have alerted her family given the serious effect of the waiver of her benefits
• Such a significant decision, made without consulting her husband, implies evidence of irrationality and no true comprehension
• Dissent: Letter asked rational questions showing a capability to understand the transaction and it may have even been beneficial for her to waive the later benefits, psychosis did not make her incapable of being reasonable even if momentary

Question 20

14. Infants

Answer 20

Unless a natural person has the capacity to incur only voidable contractual duties until the beginning of the day before the person’s 18th birthday.

Question 21

Sheilds v Gross

Answer 21

1. If the child’s parent consents when the child is still an infant, that consent is not revocable once the child is no longer an infant.
2. Dissent: the point of the statute is for parents to take care of their children – children should be able to disaffirm in cases of parental abuse.

Question 22

Webster Street v Sheridan

Answer 22

• (infants sign lease, can’t pay and must vacate, D sues for money lost between tenants)

3. Rule: Any adult that enters into a contract w/ an infant is entering into the contract knowing the risk that the contract will not be enforced.
   a. Exception: If it was a necessity for infant to sign into contract, that contract will be enforced.

Question 23

Policy of Capacity enforcement for minors

Answer 23

• Policy: this uncertainty of enforcement will hopefully discourage adults from entering into contracts with inexperienced minors, and also discourage minors from making contracts and opening themselves to exploitation
• Minors can contract for necessaries, and these contracts will be enforced as to encourage their formation if there is no other way for them to obtain the items (if voided, the minor has to pay restitution for voiding)

Question 24

162.• A misrepresentation is fraudulent

Answer 24

• A misrepresentation is fraudulent if the maker intends his assertion to induce a party to manifest his assent and the maker
o Knows or believes that he assertion is not in accord with the facts, or
o Does not have the confidence that he states or implies in the truth of the assertion, or
o Knows that he does not have the basis that he states or implies for the assertion

Question 25

162misrepresentation is material

Answer 25

• A misrepresentation is material 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.

Question 26

164. When misrepresentation makes a contract voidable

Answer 26

• If a party’s manifestation of assent is induced by either a fraudulent or a material misrepresentation by the other party upon which the recipient is justified in relying, the contract is voidable by the recipient.
• If a party’s manifestation of assent is induced by either a fraudulent or a material misrepresentation by one who is not a party upon which the recipient is justified in relying, the contract is voidable, unless the other party ito the transaction in good faith and without reason to know of the misrepresentation either gives value or relies materially on the transaction

Question 27

159 a misrep is..

Answer 27

159. A misrepresentation is an assertion that is not in accord with the facts

Question 28

167 Misrep inducing cause

Answer 28

A misrepresentation induces a party’s manifestation of assent if it substantially contributes to is decision to manifest his assent.

Question 29

Halpert v Rosenthal

Answer 29

• The repeated statements about the lack of termites induced reliance by the defendants and they assented with these statements in mind – the contract is voidable since assent based on material misrepresentation and P cannot enforce the contract even if statements made in good faith and not fraudulent.
• Rule: Even an innocent misrepresentation can be actionable if relied on as a positive statement of fact.)

Question 30

Byers v. Federal Land Co

Answer 30

• Actual ownership of land not material unless disputed at the time of payment
• Rule: Honest opinion on monetary value of land is not material misrep because it is not reasonable to rely on the value of the land (dishonest opinion maybe)
• Possession of the deed was not an issue that would create a detriment or reasonably effect assent as to make it voidable
• A substantial issue as the P lived far away from the land and needed reassurance that it would be his when he got there

Question 31

Vokes v. Arthur Murray

Answer 31

• Rule: Superior knowledge and special financial relationship allow for this to be misrepresentation
• Fiduciary Relationship
• Holding: The misrepresentations, even if opinion-based, were made with a purpose to take advantage of the plaintiff and reasonably should not have been given to her since only with the purpose to getting money from her. (Was she gullible since 50 and impossible for her to be a pro dancer? Probably, but court doesn’t punish her for this, punishes D for exploiting)

Question 32

168. Reliance on Opinions

Answer 32

• R2oC § 168 – Reliance on Assertions of Opinion

* An opinion is a statement which only expresses a belief, w/o certainty.

Question 33

169. Reliance on Opinion not Justified

Answer 33

• R2oC § 169 – When reliance on an assertion of opinion is NOT Justified
• Always, except:
o When the parties stand in a relation of trust and confidence
o When the relying party reasonably believes that, as compared w/ himself, that the person whose opinion is asserted has special skill, judgment or objectivity w/ respect to the subject matter.
o When the relying party is for some special reason particularly susceptible to a misrepresentation of the type involved

Question 34

duress

Answer 34

P is saying there is in fact a contact (offer acceptance consideration) but there is a dispute over how it was formed -> bad faith

Question 35

175. When Duress by Threat Voids Contract

Answer 35

(1) If a party’s manifestation of assent is (2) induced by an(1) improper threat (3)by the other party that leaves the victim (4) no reasonable alternative, the contract is voidable by the victim
(2) If a party’s manifestation of assent is induced by one who is not a party to the transaction, the contract is voidable by the victim unless the other party to the transaction in good faith and without reason to know of the duress either gives value or relies materially on the transaction

Question 36

176. When a threat is improper

Answer 36

A) what is threatened is a crime or a tort, or the treat itself be a crime or a tort if it resulted in obtaining property
B) what is threatened is a criminal prosecution
C) What is threatened is the use of civil process and the threat is made in bad faith
D) The threat is a breach of the duty of food faith and fair dealing under a contract with the recipient

Question 37

Hackley v Headly

Not Economic Duress

Answer 37

Because Hackley did not deny payment, but rather paid a portion due, there was no duress because he was threatening nothing illegal or improper.

1. Duress cannot be based simply on the fact that Headley was in a dire financial situation separate from any action by Hackley.
2. Cannot find Hackley’s actions as unlawful when he did not prevent Headley from receiving funds or total payment, only paid the portion he was able to
3. Imposing a subjective standard of duress based on plaintiff’s needs instead of defendant’s actions doesn’t mesh with contract purposes – make parties certain of enforcement.

Question 38

Austin v Lorel

Yes Economic Duress

Answer 38

ii. Rule: Wrongful threat + no other choice or alternative = economic duress
iii. Because Austin’s threats to not deliver the promised goods if Lorel didn’t increase the price they’d be paid for a new contract severely impeded their free will, as they did not have sufficient time to obtain a new supplier and could have lost a lucrative and important government contract without Austin’s goods, the contract conditions did meet the standard of economic duress needed to void the contract.

Question 39

US v Progressive

Answer 39

v. A buyer “must display some protest against the higher price in order to put the seller on notice that the modification is not freely entered into.”
vi. Because Progressive showed no evidence that demonstrated its lack of consent to the modification and higher price, it demonstrated more bad faith than Crane in not paying the higher price after appearing to constructively consent to it, and so there is no evidence of duress that allows it to void its contract. (Progressive never made objections or harm known, unlike Lorel who tried to look for other parties)

Question 40

Undue Influence

Answer 40

o Competent party but weakened, so other party takes advantage of this weakness to expose an inability to refuse consent
o Susceptible to heavy persuasion, lessened capacity to rule out influences
o Can be a temporary condition of weakened mind and weakened emotional state

Question 41

177 undue influence

Answer 41

o RS 177 – Undue influence is unfair persuasion of a party who is under the domination of the person exercising the persuasion or (2) who by virtue of the relation between them is justified in assuming that that person will not act in a manner inconsistent with his welfare
o 2 – If a party;s manfiestiaon of assent is induced by undue influence by the other party, the contract is voidable by the victim
o 3- if a party’s manifestation of assent is induced by one hwo is not a party to the transaction, the contract is voidable by the victim unless the other party to the transaction in good faith and without reason to know of the undue influence either gives value or relies materially on the transaction

Question 42

Unfair/excessive persuasion? (Actual taking advantage)

Answer 42

a. Multiple persuaders, improper time and/or place, emphasis on danger of delay, absence of advisors, statements allow no time to obtain advice.

Question 43

Dominant person over subjugated person? (Opportunity to take advantag)

Answer 43

b. Any dominant person

c. Person reasonably trusted.

Question 44

Odorizzi v. Bloomfield School District

Answer 44

Rule undue influence has an element of mental incapacity such that the party under influence is incapable of rational thought or action.…unable to think clearly (but different levels of mental incapacity: mental incapacity ≠ undue influence).
Rule:“In essence, undue influence involves the use of excessive pressure to persuade one vulnerable to such pressure, pressure applied by a dominant subject to a servient subject.”)
Facts: Because the school officials made Odorizzi consent to the contract while he was severely fatigued and emotionally weakened following his arrest and detainment, and since they did not allow him to consult others but rushed him to consent, their actions meet requirements of excessive pressure and undue influence, as it appeared they both took advantage of his weakened state and exploited a trusting relationship

Question 45

procedural uncon

Answer 45

o Procedural – unable to make informed/meaningful choice on contract because process/bargaining was unfair

Question 46

substan uncon

Answer 46

o Substantive –substance /terms of contract are so grossly unfair and no reasonable person would consent (so why did this person?)

Question 47

Williams v. Walker (1025)

Answer 47

No meaningful choice – fine print term that all of her purchases would be repossessed if she defaulted on payment of radio system was not easily read so unable to make an informed choice on the contract
• P: Consent effected by lack of power or knowledge during the process is not valid since the terms were likely misunderstood
• S: Terms are unconscionable if “so extreme as to appear unconscionable according to mores and business practices”

Question 48

inrealnetworks

Answer 48

• Is the agreement’s arbitration clause procedurally unconscionable? No – not procedurally unconscionable because its not hidden in fine print nor was there not sufficient time to understand the agreement as it could be printed off
• Is the agreement’s forum selection clause substantively unconscionable? No – picking a state to be the forum may be distant for some but just because distant for some does not make it so distant for all that is must be ruled unenforceable

Question 49

Wille v. Southwestern Bell (1033)

Answer 49

o The limitation of liability clause isn’t a mark of substantially unequal bargaining power nor is it so hidden in the contract to render it unenforceable – P’s repeated dealings with the yellow pages company and the typical terms of the contract indicate his further awareness.