Defenses

Question 1

When can a party argue mutual mistake as a defense to the enforcement of a contract?

Answer 1

the contract may be voidable if 1) the mistake concerns a basic assumption on which the contract is made; 2) the mistake has a material affect on the agreed-upon exchange; and 3) the party seeking avoidance did not assume the risk of the mistake.

Question 2

If only one of the parties to a contract is mistaken about facts relating to the agreement, the mistake will not prevent formation of the contract unless . . .

Answer 2

the nonmistaken party knew or had reason to know of the mistake made by the other party.

Question 3

Where an offeror transmits an offer to an intermediary, and the intermediary transmits the offer to the offeree incorrectly, which version of the offer governs?

Answer 3

the version of the offer transmitted by the intermediary unless the other party knew or should have known about the mistake.

Question 4

What is the result where there is a term in a contract subject to at least two possible meanings, and one of the parties was aware of the ambiguity but did not inform the other party of the ambiguity?

Answer 4

there is an enforceable contract, where the ignorant party’s understanding of the contract prevails.

Question 5

Fraud in the Inducement

Answer 5

where one party induces reliance by another party on facts that the inducing party knows are not true.

Question 6

Are contracts which are caused by fraud in the inducement automatically void?

Answer 6

No, they are voidable; i.e. they are capable of being voided at the choice of the defrauded party.

Question 7

When is a non-fraudulent misrepresentation voidable?

Answer 7

if the misrepresentation was material.

Question 8

When can a minor disaffirm a contract?

Answer 8

at any time, so long as it was the minor who entered into the contract with the adult.

Question 9

When can an adult disaffirm a contract with a minor?

Answer 9

if the contract was made by the adult to the minor, they cannot disaffirm and the minor can enforce the contract.

Question 10

If a minor chooses to disaffirm the contract with an adult, what must she do?

Answer 10

she must return anything she received under the contract that still remains at the time of disaffirmance.

Question 11

Can a minor disaffirm a contract for necessaries?

Answer 11

Yes, but she is liable for restitution for the value of benefits received.

Question 12

Where a minor makes a contract, and later reaches the age of majority, may he still disaffirm?

Answer 12

yes, so long as he does not affirm the contract first. A contract by a minor is not automatically affirmed by his reaching the age of majority. He must somehow affirm it while over 18 to bind himself.

Question 13

A person who is mentally incapacitated when a contract is first formed can either affirm or disaffirm the contract when . . .

Answer 13

they are lucid

Question 14

Is a person who was intoxicated at the time of their entering into a contract bound by the contract?

Answer 14

yes, if the other party did not know of their intoxication; no, if the other party had reason to know of the intoxication. However, an intoxicated individual can affirm a contract they entered into while intoxicated once they have sobered up.

Question 15

Contracts induced by duress or undue influence are _____________.

Answer 15

voidable

Question 16

Does taking advantage of a person’s economic needs considered duress?

Answer 16

No

Question 17

Are threats against one’s property considered duress?

Answer 17

Yes

Question 18

The Statute of Frauds requires that certain agreements be . . .

Answer 18

written and signed by the party to be charged.

Question 19

Do emails evincing a contract satisfy the statute of frauds?

Answer 19

yes

Question 20

Can several pieces of paper satisfy the statute of frauds?

Answer 20

yes

Question 21

Does writing on a napkin showing the particulars of the contract satisfy the statute of frauds?

Answer 21

yes

Question 22

Under the SoF, must a signature be handwritten?

Answer 22

No, it can be typed or printed, so long as it is intended to be a signature.

Question 23

What can suffice to be a signature under the UCC?

Answer 23

a party’s initials or letterhead.

Question 24

Must both parties to a contract sign the contract under the SoF?

Answer 24

No, only the party to be charged.

Question 25

Must a contract to build a building on the land be written and signed under the SoF?

Answer 25

No, these are not covered by the SoF because they do not create an interest in land.

Question 26

________________ by the seller will take a contract out of the statute of frauds.

Answer 26

full performance

Question 27

________________ by the buyer will take a contract out of the SoF.

Answer 27

partial performance

Question 28

When is a writing not required under the SoF?

Answer 28

there are three instances where a writing is not necessary under the SoF because the terms are satisfied: 1) specially manufactured goods; 2) admissions in pleadings or court; and 3) if goods are received/accepted or paid for.

Question 29

The Merchant’s Confirmatory Memo rule only applies to what kind of contracts?

Answer 29

oral contracts between merchants.

Question 30

How long does a receiver of a merchant’s confirmatory memo have to object to the memo before it is binding on both parties?

Answer 30

10 days

Question 31

What is the effect of a contract not meeting the requirements of the SoF?

Answer 31

the party to be charged can choose not to enforce the contract. If they choose to enforce it anyways, the statute is waived.

Question 32

Where a buyer makes an oral promise to pay for real estate and there is no writing, the seller can avoid having to make a writing by . . .

Answer 32

conveying the land to the buyer; i.e. completing performance. Complete performance by a seller removes a contract from the statute of frauds.

Question 33

Where a seller makes an oral contract to sell real estate to a buyer and there is no writing, the buyer can avoid having to make a writing by . . .

Answer 33

partial performance. Partial performance by a buyer to an oral sale of land contract takes a sale of real estate out of the statute of frauds.

Question 34

When does partial performance of a sale of goods contract take the contract out of the statute of frauds?

Answer 34

where the goods are 1) specifically made; or 2) the goods have been either paid for or accepted.

Question 35

An oral contract that cannot be completed within one year but has been fully performed by one party is _____________.

Answer 35

enforceable

Question 36

Is a contract with unfair prices for goods unconscionable?

Answer 36

No

Question 37

A contract contains a clause which shifts the burden of risk of loss normally borne by one party to another. Is this unconscionable?

Answer 37

yes

Question 38

A contract contains a provision stating that the buyer takes the goods as they are and that the seller is not responsible for any defects in them. Unconscionable?

Answer 38

yes

Question 39

An exculpatory clause releasing a party from _____________ behavior is unconscionable, whereas an exculpatory clause releasing a party from ______________ conduct are usually upheld if the clause is not inconspicuous.

Answer 39

intentional wrongful; negligent

Question 40

Are contractual clauses limiting liability for damages unconscionable?

Answer 40

Generally, no.

Question 41

Unconscionability is determined by the circumstances as they existed at the time . . .

Answer 41

the contract was formed.

Question 42

How will a court treat a contract in which there is an unconscionable provision?

Answer 42

the court will either 1) refuse to enforce the contract; 2) refuse to enforce the specific provision while keeping the rest of the contract enforceable; or 3) limit the application of any clause so as to avoid an unconscionable result.