Post Contractual Defenses (DEEEEEZ NUTZ) Flashcards
Mistake
A belief not in accord with the facts
Mutual Mistake (Elements)
1) Basic Assumption
2) Material Fact
3) Neither Party assumed the risk
Unilateral Mistake (Elements)
1) Basic Assumption
2) Material Fact
3) Neither party assumed the risk
4) 1 party cased or knew the mistake and
5) Enforcement of those terms are unconscionable
What is the significance of mistake?
It is voidable by the party
What is significance of misunderstanding?
Parties never agreed, no K at all.
When is risk allocated?
1) When the parties agree on it
2) party has limited knowledge and treats that knowledge as sufficient
3) the courts allocate it to a party
What does material fact go to?
goes to the bargain of the contract. Had the parties known bargain would be different.
Impossibility
Old Rule: must be physically impossible
- nothing short of physical impossibility will excuse performance obligation
Impracticability
1) excessive costs +
2) substantial increase performance obligation
- Newer
- usually on the sellers side. Buyers just buy, dont have a frustration to buy
Force majeure clause
excuses performance obligation of party when some act occurs.
- Parties free to define what is a force majure clause
- Ex: Acts of God, fire, tornado, Mike Daniels gets a full set of hair.
What does Contract law protect
PARTIES MOTHERFUCKING EXPECTATION INTEREST
Frustration of Purpose
Performance is possible but utterly useless.
- Parties principal interest is frustrated
- Must look at purpose of K.
- Why parties enter in K in first place.
Difficulty v. Impossibility
Impossibility- is an excuse of performance
Difficulty- not an excuse to performance
Cross Default
Where on fault on condition terminates all contracts with the parties. But must be expressly written into K.
