Flaws in the Bargaining Process

Question 1

Ambiguity as a Defense

Answer 1

Need:

1. Material term open to AT LEAST 2 interpretations
2. each party has a different interpretation in mind
3. neither person knows or has reason to know the term is open to at least 2 reasonable interpretations

Question 2

What do you need for mutual mistake?

Answer 2

1. both parties are mistaken as to an EXISTING fact
2. that fact is material (goes to the heart of the K)

This means NO k.

***Mutual mistake as to value - there is still a K

Question 3

When can a unilateral mistake be a defense?

Answer 3

Palpable mistake - other party has reason to know of mistake, then he will not be allowed to take advantage of it.

Question 4

Equal Dignity Rule

Answer 4

In order to act on behalf of someone, need writing ONLY if they would have needed it under SOF.

Question 5

What if the K itself states “all modifications must be in writing?”

Answer 5

CL - Disregard. NO effect.

UCC - enforced unless the clause is waived.

Question 6

Illegality: purpose v. subject matter

Answer 6

Illegal purpose - usually irrelevant (fly delta to hurt someone, still liable to delta)

Illegal subject matter - paid to beat someone. This will not be enforced.

Question 7

Misrepresentation as a defense

Answer 7

Need:

1. Statement of Fact by party or party’s agent
2. statement is false
3. induces the K

then, can rescind

Question 8

What if the misrepresentation is honest and in good faith?

Answer 8

DON’T CARE. That is for torts. Rescind anyway.

Question 9

Can omissions by a party result in rescission?

Answer 9

ONLY if wrongdoing, like concealment. Then rescission.

Example: no duty to tell about rusted car, but if paint car orange to cover rust then can rescind based on omission.

Question 10

When do you have undue influence?

Answer 10

1. Special relationship between the parties

2. Improper persuasion