DEFENSES OF A K

Question 1

Defenses to a Contract

Answer 1

1) Incapacity
2) Illegality
3) Against Public Policy
4) Misrepresentation/Nondisclosure 5) Duress
6) Ambiguity/Misunderstanding
7) Mistake
8) Statute of Frauds

Question 2

Defenses to a Contract:

Incapacity

Answer 2

Under 18 → has a right to disaffirm K unless minor retains benefit after gaining capacity.

Question 3

Defenses to a Contract:

Illegality

Answer 3

Subject matter illegal → K is void;

Subject matter is legal, but purpose is illegal → K enforceable only by person who didn’t know of illegal purpose.

Question 4

Defenses to a Contract:

Against Public Policy

Answer 4

May include covenants not to compete, exculpatory clauses, etc.

Question 5

Defenses to a Contract:

Misrepresentation/Nondisclosure

Answer 5

Innocent party may rescind if induced to enter K by fraudulent misrepresentation or non-fraudulent material misrepresentation.

Question 6

Defenses to a Contract:

Ambiguity/Misunderstanding

Answer 6

1) Each party uses a material term open to two reasonable interpretations;
2) Each party attaches diff meaning to term; and
3) Neither party knows or has reason to know the term is subject to two interpretations causing ambiguity.

Question 7

Defenses to a Contract:

Mistake

Answer 7

Mutual mistake → No K if mutual mistake on basic assumption of fact that materially affects agreed upon exchange and not a risk that either party bears.
Unilateral mistake → not voidable unless other party knew or should have known.

Question 8

Defenses to a Contract:
Statute of Frauds
When does it apply?

Answer 8

Applies to MY LEGS:

(1) Marriage;
(2) Contract for 1 Year +;
(3) Land;
(4) Executory guarantee;
(5) Goods > $500;
(6) Suretyships.

Question 9

Defenses to a Contract:
Statute of Frauds
How is it satisfied?

Answer 9

Satisfy by:
1) Performance;
2) Writing; or
3) Judicial admission.
In real estate, part performance requires 2 out of 3 of the following: (i) payment; (ii) possession; or (iii) improvements.

Question 10

Defenses to a Contract:
Statute of Frauds
What are the writing requirements?

Answer 10

Non-UCC: parties, subj matter, terms & conditions, consideration, and signature.
UCC: quantity terms and signature, unless confirmatory memo of oral K and no objection within 10 days.

Question 11

Defenses to a Contract:

Duress

Answer 11

Improper threat and no reasonable alternative.

Question 12

Defenses to a Contract:

Unconscionable

Answer 12

Unfair surprise and oppressive terms at time of K.