DEFENSES TO FORMATION Flashcards
Lack of Capacity (3) ((FLORIDA))
- infant (under 18)((FL-marriage removes incapacity, despite death of spouse or dissolution)
- mental incomp (lack ability to understand agreement)
- intoxicated persons if other party has reason to know
Incapacity Consequences (3)
- VOIDABLE
- retain benefits after gaining capacity- RATIFICATION
- Quasi-K liability for NECESSARIES
- a person who does not have capacity is legally obligated to pay for things necessary (food, clothing, medical care, or shelter) but that liability is based on Quasi K law, not K law
What is the Statute of Frauds?
designed to prevent fraudulent claims of the existence of a K by requiring “claimant” have OBJECTIVE PROOF
- performance
or - writing signed by person to be charged, D
4 K’s within S of F
- Suretyship (promise to answer anthers debts)
- Year
- Land
- Goods
Suretyship (S of F)
a promise to pay for a person’s debts if THAT person does not pay (look for a GUARANTEE)
“main purpose exception”- if main purpose of obligation allegedly guaranteed was to benefit the guarantor then not even that guarantee is within the S of F
Year (S of F)
service contract not “capable” of being performed within a year from the time/date of the contract
ex. 3 yr employment K
ex. contract for a year starting next month
ex. employ for the rest of P’s life - NO S of F
Land (S of F)
transfer of interest in real estate (except for leases of a year or less)
Performance - transfer of real estate (S of F)
part performance satisfies the statute of frauds by any two of the 3:
- improvements to the land
- payment
- possession
Performance - Service Ks (S of F) (2)
- full performance by either satisfies the S of F
2. part performance does NOT
Part Performance - Sale of ordinary goods Ks (seller)
ORDINARY GOODS- (rule) part performance of a K for the sale of goods satisfies the statute of frauds but only to the extent of the performance (look to see if question is about DELIVERED or UNDELIVERED goods)
Part Performance - Sale of special manu Goods Ks (seller)
SPECIALLY MANUFACTURED- (rule) if the K is for the sale of goods that are to be specially manufactured then S of F satisfied as soon as the seller makes substantially beginning
(seller has done enough work to clearly show what he is working on is clearly manufactured)
S of F other than article 2 (CL)
“All material Terms test”
- WHO is making agreement
- WHAT did they agreed to do
S of F (Article 2) (3)
writing must indicate:
- K for the sale of goods
- quantity term
- signed by the defendant (limited exception for transactions btwn two merchants where there is a delay in responding)
Judicial Admission (S of F)
satisfied if D admits in a pleading or testimony that he had entered into an agreement with the plaintiff
Estoppel (S of F)
some cases hold that the Ps reliance on Ds oral promise can estop the D from asserting a statute of frauds defense
use of S of F OTHER THAN DEFENSE (3)
- written proof of authorization to enter into a K for someone else
- IF the K itself is w/in S of F - written proof of modification
(i) look at the deal with the alleged change
(ii) determine whether the alleged change would be w/in S of F - K provisions requiring written modification:
CL–> K provisions requiring in writing ineffective
UCC–> effective unless WAIVED
Illegality (2) ((FLORIDA))
Illegal SUBJ MATTER- NOT ENFORCEABLE
illegal PURPOSE- if subj matter legal, agreement enforceable if P did not have reason to know of Ds illegal purpose
((FLORIDA) must be proved by party that asserts it))
Public Policy (K enforcement)
courts can refuse to enforce an agreement bc of public policy
- look for an exculpatory agreement that exempts intentional or reckless conduct from liability OR a covenant not to compete without a reasonable need or reasonable time and place limits
- reasonable: (i) need for protection (ii) geographic coverage (iii) time period
Misrepresentation (4)
- state of fact BEFORE K
- by one of K parties or her agent
- that is false
AND - induces the K
*dont need fraud or negligence
Nondisclosure (K enforcement)(2)
generally a person making a K has NO DUTY to disclose what she knows, look for:
1.fiduciary like duty
or
2. concealment
Duress (K enforcement)(2)
- physical duress
- economic duress -
(i) “bad guy”- improper threat usually to breach
(ii) “vulnerable guy”- no reas alternative
Undue influence (K enforcement) (2)
- special relationship btwn the parties
AND - improper persuasion of the weaker by the stronger
Unconscionability (two tests)
part of general k law that empowers court to refuse PART or ALL of an agreement
- Unfair surprise (procedural), oppressive terms (substantive) are
- tested as of the time agreement was made by the court
Ambiguity in words of agreement (3)
no K if:
- MATERIAL term open to at least 2 reas interpretations
- and each party attaches different meaning to the term and
- neither party knows or has reason to know term is open to at least two reas interpretations
Mistake of Fact (existing at time of K)
MUTUAL- relief only if both parties are MISTAKEN (not just uncertain) about existing facts, even then no relief for mistake if the person seeking relief bears the risk of the mistake
UNILATERAL- only relief for situations in which the other party had reason to know of the mistake
Impossibility
where the goods are IDENTIFIED in the K and then are TOTALLY LOST, K is avoided
ex. K for strawberry crop, a freeze destroys
Stat Exceptions to lack of capacity ((FLORIDA))
- minors can borrow student loans
- unwed pregnant minors can K for medical services
Fraud of Minor ((FLORIDA))
estopped from capacity defense if
- minor induced K
- by fraudulent misrepresentation
((FLORIDA) S of F Writings FOR)): (6)
- charging any healthcare for med procedure
- debt barred by SofL
- writing -signed by party to be charged - newspaper/periodical subscriptions
- home solicitation sales
- home improvement K’s
- credit agreements
(1) writing (2) express consideration (3) relevant terms and conditions AND (4) signed by both CREDITOR and DEBTOR
