Defenses to Formation Flashcards
Hurdles to Formation (SEAMMDULL)
Statute of Frauds, Existing Law Prohibiting Performance, Ambiguity in Words, Mistake At Time of the Agreement As to Material Fact, Misrepresentation, Duress, Unconscionability, Lack of Capacity from Promisor, Lack of Consideration
Infancy
Lack of Capacity: Child under 18 lacks capacity to enter into contracts.
However, adult to child contracts are binding on adult.
Disaffirmance
Lack of Capacity: Infancy: infanct may choose to disaffirm a contract ANY TIME before (or shortly after) reaching 18
If disaffirmed infant must return anything THAT STILL REMAINS at the time of Disaffirmance that infant received under contract.
Affirmance
Lack of Capacity: Infancy: Infant may affirm upon reaching 18.
May affirm either expressly or by conduct
(FAILING TO DISAFFIRM within a REASONABLE time after Reaching Age of Majority)
Mental Incapacity
Lack of Capacity: Person so deficient that he is incapable of understanding the NATURE AND SIGNIFICANCE of the contract MAY DISAFFIRMED when lucid or by legal representative.
May likewise affirm.
Contract is VOIDABLE
Liable in Quasi-Contracts for necessities furnished to them
Intoxicated Persons
lack of capacity: So intoxicated to not understand that substance and nature of the contract.
Voidable promise if other party had reason to know of intoxication
Liable for necessities provided to them during intoxication under Quasi-Contract.
Duress and Undue Influence
Duress: Contracts are voidable.
Generally taking advantage of another person’s economic needs IS NOT DURESS
Statute of Frauds
Contracts that need to be in writing, signed by the parties intended to be bound.
Writing Requirement of SOF
Something written evidencing material terms which is signed by the party intended to be bound.
Agreements Covered by SOF
Executor/Administrator Promises to Personally pay Estate Debts, Surety Promises/ Promises in Consideration of Marriage (Pre-Nups), Interests in Land (leases/easment for more than 1 year), Performance Not Within 1 year (excluding lifetime contracts), Goods Priced at $500 or more.
Surety Promises
A promise to answer for the debt or default of another
Executor/Administrator Promises to Personally to Pay Estate Debts
A promise to pay the estate’s debts OUT OF OWN FUNDS
Promises In Consideration for Marriage
Promises that induce marriage by offering something of value, prenups (ect.,)
Interests in Land
Leases/Easement more than 1 year, Fixtures, Minerals, Mortgages,
Performance Not Within One Year
Promise by its terms CANNOT BE COMPLETED WITHIN ONE YEAR
EFFECTIVE DATE: Date runs from the date of agreement
LIFETIME CONTRACTS: Not within SOF
Goods Priced at $500 of more (SWAP)
Must meet SOF,
Exceptions: Specially Manufactured Goods Admission in Pleadings or Court Payment or Delivery of Goods Merchant Confirmatory Memo
Specially Manufactured Goods
Sellers made a SUBSTANTIAL BEGINNING in the manufacturing or committments
Satisfaction of SOF
Full performance by either party.
Part Performance, but only to the extent of Part Performance.
Part Performance for Real Estate Contracts (2 out of 3)
UCC SOF
Contens of the writing, who signed the writing, QUANTITY TERM
Merchant’s Confirmatory Memo
Both parties MUST BE MERCHANTS, person who receives a signaled writing WITH QUANTITY TERM, that claims there is not a contract FAILS TO RESPONSE WITHIN 10 days
Equal Dignity Rule
One can execute a contract for someone else, however, the authorization MUST BE IN WRITING if the contract to be signed IS WITHIN THE SOF.
Contract Modification and the SOF
Look at deal with alleged change AND determine whether the deal with the alleged change would be within the SOF.
IF it is then the modification must be in writing
Common Law Modifications and SOF
Contract provision requiring all modifications to be in writing are ignored
UCC Contract Modifications and the SOF
Contract provision requiring written modifications are effective unless waived
