Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Contracts > Defenses to K Enforcement > Flashcards

Defenses to K Enforcement Flashcards

1
Q

Common Defenses (IMDUUP)

A

Include:

  • Incapacity (Infancy and Mental Incompetence)
  • Misrepresentation
  • Duress
  • Undue Influence
  • Unconscionability
  • Public Policy
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Infancy

A

An infant (a minor) lacks capacity to enter into a K. Therefore, the modern rule is that minors may enter into a K but the K is voidable at option of minor and the minor only (power of avoidance).

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What About Minors Who Are Married or Emancipated?

A
  • Majority rule- minors still have the power of avoidance
  • Minority rule- hold that deprived married or emancipated minors of the power of avoidance, making all Ks they enter into enforceable against them
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Power of Avoidance as a Shield Rather than a Sword

A
  • There is an increasing trend toward limiting minors’ use of the power of avoidance to a defense only.
  • Therefore, a minor cannot use defense to bring suit against the other party to secure restitution of monies already paid.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Minor’s Duty to Return Goods

A
  • Upon exercising the power of avoidance, the minor is obligated to return to the other party any goods received under the K.
  • Minor is not liable for damage, wear and tear, or any other depreciation in value of the goods
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Ratifications by Minors

A

For most Ks that minors enter into before reaching the age of majority, the minor may ratify that K upon reaching the age of majority

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

How Can a Minor Ratify a K?

A
  • By making any manifestation to the other party of an intention to be bound by the original contract.
  • Silence is not enough unless minor continues to take advantage of goods or services provided under the K.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Minor Ks for Necessaries

A
  • Ks involving items necessary for survival (food, clothing, shelter, and medical care). Are also voidable although the other party has a quasi-K right to recover the reasonable value of goods or services provided.
  • Parents can be liable for necessaries furnished to their minor child.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Misrepresentation by Minor Regarding their Age

A
  • Majority rule- holds that this doesn’t matter

- Minority rule- minor is equitably estopped from using infancy as a defense (therefore, K is enforceable)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Mental Incompetence

A

If an individual was “incompetent” at the time K was formed, they are not bound to the K. It is voidable by the incompetent person alone.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What Constitutes “Incompetence”

A
  • A previous adjudication of mental incompetence by the court; or
  • finding of cognitive defects
  • finding of volitional defects
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Cognitive Defects

A

When a person lacking capacity enters into a K if the person is unable to understand in a reasonable manner the nature and consequences of the transaction.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Volitional Defects

A

When a person is unable to act in a reasonable manner in relation to the transaction and the other person has reason to know of this condition.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Ratification After Gaining Competence

A

Is also permitted

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Mental Incompetent’s Duty to Return Goods

A
  • A mentally incompetent party will be responsible for damage, wear and tear, or any other depreciation in value of the goods, unless the other party takes unfair adv. of the mentally incompetent person and has knowledge of the person’s incompetence.
  • The other party is only entitled to a return “as is” of any goods, and will have no right of recovery for goods or services already consumed.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Misrepresentation

A

-Untrue statements or assertions that relate to existing facts. Statements of opinion do not count unless one holds himself out as having knowledge/skill (facts disguised as opinions)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

For Statements to Be Actionable

A

Misrepresentation must be material to K and reliance must be obj. reasonable.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Types of Misrepresentation

A
  • Fraudulent Misrepresentation
  • Non-Fraudulent Misrepresentation
  • Fraudulent Nondisclosure
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Fraudulent Misrepresentation

A

Statements or conduct that is inconsistent with existing facts + scienter and intent to mislead + material to misrepresentation + causes reasonable reliance.

20
Q

Fraudulent Misrepresentation: Types of Materiality

A

Can include both:

  • Obj. materiality- where such an assertion is likely to induce a reasonable person to enter into a K.
  • Subj. materiality- if the party making the assertion had reason to know that it was likely to induce the particular aggrieved party into entering the K.
21
Q

Non-Fraudulent Misrepresentation

A

Misrepresentation + materiality of the misrepresentation + reasonable reliance on the misrepresentation (without scienter and intent). Includes negligent and innocent misrepresentation.

22
Q

Negligent Misrepresentation

A

When a D would have known the assertion was false had he exercised reasonable care.

23
Q

Innocent Misrepresentation

A

The D made an assertion not in accord with existing facts.

24
Q

Fraudulent Nondisclosure

A
  • If a party is aware of material facts that are unlikely to be discovered by the other party in the exercise of ordinary care and diligence, then there will be a duty to disclose that information if:
  • there is a special relationship of trust and confidence
  • if a party has made an assertion that was true at the time but has been rendered untrue by intervening events; or
  • if the obligation of good faith would require that the party disclose the information
25
Q

Remedies for Misrepresentations

A

Can include:

  • avoidance
  • rescission and reliance damages
  • accept the K and sue for the benefit of the bargain (not available for fraudulent nondisclosure)
26
Q

Duress

A

Has 3 elements:

-a threat (manifestation of intent to inflict harm on the other person) + that is wrongful in nature (involves criminal or tortious conduct) + that leaves the aggrieved party with no reasonable choice but to succumb to the threat

27
Q

Duress: Threats to Bring Civil Actions?

A

Are wrongful only if made in bad faith – that is, if the perpetrator does not honestly and reasonably believe that the target has civil liability.

28
Q

Economic Duress

A

A threat is sufficient to constitute duress if what is threatened is bad faith breach of K.

29
Q

Third Party Duress

A

If threat is made by a third party, rather than K party, there is still a valid claim of duress unless:

  • the other party gives value or relies materially on the transaction; and
  • the other party is proceeding in good faith without reason to know of the duress
30
Q

Remedies for Duress

A

Ks made under physical compulsion are void.

Ks entered into under other forms of duress are voidable at the option of the aggrieved party.

31
Q

Undue Influence

A

When circumstances reveal a vulnerable, but not incapacitated, party who succumbs to untoward bargaining tactics and pressures from the other party.

32
Q

Two Req. for Undue Influence

A

There are two elements to the defense of undue influence:

  • unfair persuasion was used; and
  • the other party was vulnerable to such persuasion
33
Q

Undue Influence: Important Factors for Unfair Persuasion

A
  • Discussion of the transaction at an unusual or inappropriate time
  • Consummation of the transaction at an unusual place
  • Insistent demands that the transaction or business be finished immediately
  • Extreme emphasis on the untoward consequences of delaying the transaction
  • The use of multiple persuaders against the target of persuasion
  • Absence of third-party advisers to the target of persuasion; and
  • Statements that there is no time to consult financial advisers or attorneys
34
Q

Undue Influence: Vulnerable Parties

A

Include:

  • those with mental infirmity due to age or illness
  • those with vulnerability due to recent trauma or event
  • those where there is a relationship of trust or confidence
35
Q

Remedies for Undue Influence (When Other K Party Causes the Influence)

A
  • K obligations assumed under undue influence are voidable at the option of the aggrieved party.
  • The aggrieved party is also entitled to restitution of any benefits conferred on the other party, but must return the value in excess of those benefits to the other party
36
Q

Remedies for Undue Influence (When 3rd Party Causes Undue Influence)

A

The aggrieved party has the power of avoidance unless:

  • the other party gives value or relies materially on the transaction; and
  • the other party is proceeding in good faith without reason to know of the undue influence
37
Q

Unconscionability

A

When a party uses inappropriate bargaining tactics to take unfair advantage of a vulnerable party.

38
Q

Elements of Unconscionability

A
  • Procedural unconscionability
  • Substantive unconscionability
  • Both elements are required in most jurisdictions. But where there is an extremely strong showing of one element the party may succeed despite a weaker showing of the other element
39
Q

Procedural Unconscionability

A

-Where the bargaining process that produced the K in question created an absence of meaningful choice for the aggrieved party

40
Q

Substantive Unconscionability

A

When K terms are unreasonably unfavorable to the aggrieved party

41
Q

Remedies for Unconscionability

A

Include:

  • Refusal to enforce the K
  • Excise the offending clause and enforce the remainder of the K; or
  • Limit the application of the offending clause as to avoid any unconscionable result
42
Q

Public Policy

A

Defense that courts should not enforce a K because doing so would violate or undermine some important public policy.

43
Q

When the Public Policy Defense Applies

A

Include:

  • where SM of K itself is specifically prohibited by law
  • where K is formed for the purpose of committing a crime or violating a legal regulation
  • where K performance would require commission of tort
  • where the K performance would violate certain values and freedoms designated by the state or jurisdiction
44
Q

Non-Compete Agreements

A

Will be enforced if reasonable (looks at geographical barrier, duration, or term). If unreasonable they will be rendered void as against public policy.

45
Q

Blue-Pencil Rule for Non-Competes

A

Most jurisdictions remove the offending portion of the non-compete while enforcing the remainder of it.

Contracts (10 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions