Kaplan Pgs 258-275 Defenses Flashcards
What is the difference between how the common law in the modern law treats minority?
Dash common law: minors do not have the capacity to enter a contract
– modern law: minors can enter a contract, but it is voidable at the option of the minor. Sometimes it can be ratified or the minor can still be liable for benefits he got
What is a possible exception to the power of avoidance for minors?
Some jurisdictions say that if a minor is married or emancipated he does not have the power of avoidance
What’s a minor disaffirm the contract, what is his obligation?
He hast to return to the other party any good that he got under the contract if they are in his possession when he does affirms. Or if he sold the goods, then he hast to turn over the proceeds from the sale. If he no longer has the goods or the contact was for something like a service that is non-returnable, he has no obligation to compensate the other party
Minority view: he hast to make the other party hall, he is liable for depreciation, he must compensate for services or other non-returnable items, etc.
If a minor disaffirm the contract, is he liable for damage, where in tear, and depreciation in the value of the goods that he returns?
No
How does a minor ratify a contract once he reaches majority?
By making any manifestation to the other party of an intent to be bound by the original contract or if he keeps using the goods under the contract. But just silence is not enough
Minority: if the minor doesn’t disaffirm within a reasonable time after reaching majority, the contract is deemed ratified
What is a minor disaffirm the contract, what happens?
The contract is void
Minors are liable for their necessities, but only to what extent?
They only have to pay the reasonable value of those things, not the contract price
What is a minority rule when a minor miss represents his age to get goods or services?
He is equitably is stopped from providing his real age in court and he can’t use the defence of infancy
What are the two situations that create mental incompetence so that a person cannot enter a contract?
– Cognitive defects: if the person is unable to understand in a reasonable manner the nature and consequences of the transaction
Dash volitional defect: if the person is unable to act in a reasonable manner in relation to the transaction and the other party has reason to know what this condition. I.e.: if a manic depressive enters a contractor in a manic phase and the other party had reason to know about this
What is the legal consequence of a minor entering a contract?
The contract is voidable. This means that it is enforcible at the option of the incompetent person, not completely void
If a person is mentally incompetent at the time of contracting, can he ratify the contract later when he becomes competent?
Yes, through oral or written manifestation of the intention to be bound
If a mentally incompetent person avoids a contract, but had gotten some benefit under the contract, what must you do?
He must make the other party hall and he is also responsible for damage, wear and tear, and other depreciation (unless the other party took unfair advantage of the mentally incompetent person and had knowledge of the incompetence, then he only has to return things “as is“)
What are the elements for fraudulent misrepresentation?
– Defendant made an assertion that was inconsistent with existing facts
– he New it was false or didn’t know if it was false and had the intention to miss lead
– it was about something material to the contract
– there was reasonable reliance on the contract
What are the two types of misrepresentation?
– Fraudulent misrepresentation
– non-fraudulent misrepresentation
What is non-fraudulent misrepresentation and what are its elements?
Miss representation that happens for negligence or an innocent misrepresentation
– defendant made an assertion that was inconsistent with existing facts
– misrepresentation was material
– there was reasonable reliance on it
What is the difference between negligent misrepresentation and innocent misrepresentation?
– Negligent: it must be shown that the perpetrator would have known that what he was saying was false if he had exercise reasonable care
– innocent: you must show only that the perpetrator made an assertion that wasn’t true
What is fraudulent nondisclosure?
Silence when there was a duty to disclose. You must show that the nondisclosure was material to the contract and that there was reasonable reliance on it
Generally there is no duty of disclosure, except under what situations?
Dash if the parties enjoy relationship of trust and confidence: like family members
– if a party made an assertion that was true but ended up not being true
– if there is an obligation of good faith
What are the two remedies that someone can get if they have been a victim of fraudulent or non-fraudulent misrepresentation or non-disclosure?
Dash they can avoid the contract
– recession and reliance damages
Dash live with the contract and still for the benefit of the bargain (difference between the value of the goods or services that he actually received in the value of the promised goods or services). Although this option is not available for negligent or innocent misrepresentation
A common law what are the two situations that dress would be available?
Dash if the party had to sign the contract under force of physical compulsion
– if he had to sign the contract under threat of unlawful activity against himself or family
What are the elements for modern duress?
Dash a threat must be made
– that is wrongful in nature
Dirt and leaves the aggrieved party with no reasonable choice but to succumb to the threat
What are some situations that would count as duress because the aggrieved party had no reasonable choice but to succumb to the threat?
Dash if there was no adequate or reasonably priced substitute for the thing that the perpetrator is threatening to withhold
– if the breach would cause the aggrieved party to break his own contracts
– if having to sue for damages is in adequate to redress harms to the aggrieved party
What happens if a contract was entered under duress?
Contracts made under physical compulsion are void, and those entered under other forms of duress are voidable
What must the aggrieved party do if he avoids eye contact because of duress?
He gets restitution of any benefits that he conferred and he must return excess value of benefits to the perpetrator
