Defenses to Formation Flashcards
What are the 5 types of defenses to formation?
- Mistake
- Fraud or misinterpretation
- Duress
- Undue influence
- Illegality
What is duress?
Coercion
What are the types of capacity for the formation of a contract?
- Legal age
2. Mental capacity
T/F: A minor is prohibited by law from entering into contracts.
False
What does disaffirm mean?
Avoid liability
What are the exceptions to a minor’s right to disaffirm?
- Item of necessity
- Meet standard of living
- Not be under a parent/guardian
T/F: An intoxicated person can avoid a contract made while intoxicated.
True
What is a unilateral mistake?
One of the parties makes a mistake. The mistake is binding on the mistaken party.
What is a bilateral mistake?
Both parties are mistaken.
What are the elements of fraud?
- Deception is material
- Relied on false representation
- Intent
What are forms of duress?
- Physical threats
- Threats to disclose private info
- Economic pressure
What is usury?
Charging a higher interest rate than permitted by law.
What is an exculpatory clause?
A clause in a contract that disclaims any liability regardless of fault.
T/F: A clause in a sale of goods that eliminates all liability for personal injuries are caused by a product is void.
True
What are the elements to have an enforceable covenant-not-to-compete?
- Ancillary (part of a larger contract)
2. Reasonable length of time and geographic scope
