DEFENSES TO FORMATION

Question 1

Lack of Capacity (3) ((FLORIDA))

Answer 1

1. infant (under 18)((FL-marriage removes incapacity, despite death of spouse or dissolution)
2. mental incomp (lack ability to understand agreement)
3. intoxicated persons if other party has reason to know

Question 2

Incapacity Consequences (3)

Answer 2

1. VOIDABLE
2. retain benefits after gaining capacity- RATIFICATION
3. 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

Question 3

What is the Statute of Frauds?

Answer 3

designed to prevent fraudulent claims of the existence of a K by requiring “claimant” have OBJECTIVE PROOF

1. performance
   or
2. writing signed by person to be charged, D

Question 4

4 K’s within S of F

Answer 4

1. Suretyship (promise to answer anthers debts)
2. Year
3. Land
4. Goods

Question 5

Suretyship (S of F)

Answer 5

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

Question 6

Year (S of F)

Answer 6

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

Question 7

Land (S of F)

Answer 7

transfer of interest in real estate (except for leases of a year or less)

Question 8

Performance - transfer of real estate (S of F)

Answer 8

part performance satisfies the statute of frauds by any two of the 3:

1. improvements to the land
2. payment
3. possession

Question 9

Performance - Service Ks (S of F) (2)

Answer 9

1. full performance by either satisfies the S of F

2. part performance does NOT

Question 10

Part Performance - Sale of ordinary goods Ks (seller)

Answer 10

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)

Question 11

Part Performance - Sale of special manu Goods Ks (seller)

Answer 11

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)

Question 12

S of F other than article 2 (CL)

Answer 12

“All material Terms test”

• WHO is making agreement
• WHAT did they agreed to do

Question 13

S of F (Article 2) (3)

Answer 13

writing must indicate:

1. K for the sale of goods
2. quantity term
3. signed by the defendant (limited exception for transactions btwn two merchants where there is a delay in responding)

Question 14

Judicial Admission (S of F)

Answer 14

satisfied if D admits in a pleading or testimony that he had entered into an agreement with the plaintiff

Question 15

Estoppel (S of F)

Answer 15

some cases hold that the Ps reliance on Ds oral promise can estop the D from asserting a statute of frauds defense

Question 16

use of S of F OTHER THAN DEFENSE (3)

Answer 16

1. written proof of authorization to enter into a K for someone else
   - IF the K itself is w/in S of F
2. 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
3. K provisions requiring written modification:
   CL–> K provisions requiring in writing ineffective

UCC–> effective unless WAIVED

Question 17

Illegality (2) ((FLORIDA))

Answer 17

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))

Question 18

Public Policy (K enforcement)

Answer 18

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

Question 19

Misrepresentation (4)

Answer 19

1. state of fact BEFORE K
2. by one of K parties or her agent
3. that is false
   AND
4. induces the K

*dont need fraud or negligence

Question 20

Nondisclosure (K enforcement)(2)

Answer 20

generally a person making a K has NO DUTY to disclose what she knows, look for:

1.fiduciary like duty
or
2. concealment

Question 21

Duress (K enforcement)(2)

Answer 21

1. physical duress
2. economic duress -
   (i) “bad guy”- improper threat usually to breach
   (ii) “vulnerable guy”- no reas alternative

Question 22

Undue influence (K enforcement) (2)

Answer 22

1. special relationship btwn the parties
   AND
2. improper persuasion of the weaker by the stronger

Question 23

Unconscionability (two tests)

Answer 23

part of general k law that empowers court to refuse PART or ALL of an agreement

1. Unfair surprise (procedural), oppressive terms (substantive) are
2. tested as of the time agreement was made by the court

Question 24

Ambiguity in words of agreement (3)

Answer 24

no K if:

1. MATERIAL term open to at least 2 reas interpretations
2. and each party attaches different meaning to the term and
3. neither party knows or has reason to know term is open to at least two reas interpretations

Question 25

Mistake of Fact (existing at time of K)

Answer 25

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

Question 26

Impossibility

Answer 26

where the goods are IDENTIFIED in the K and then are TOTALLY LOST, K is avoided

ex. K for strawberry crop, a freeze destroys

Question 27

Stat Exceptions to lack of capacity ((FLORIDA))

Answer 27

• minors can borrow student loans

- unwed pregnant minors can K for medical services

Question 28

Fraud of Minor ((FLORIDA))

Answer 28

estopped from capacity defense if

1. minor induced K
2. by fraudulent misrepresentation

Question 29

((FLORIDA) S of F Writings FOR)): (6)

Answer 29

1. charging any healthcare for med procedure
2. debt barred by SofL
   - writing -signed by party to be charged
3. newspaper/periodical subscriptions
4. home solicitation sales
5. home improvement K’s
6. credit agreements
   (1) writing (2) express consideration (3) relevant terms and conditions AND (4) signed by both CREDITOR and DEBTOR