Quiz 7 Flashcards
R2 130 Contract Not to Be Performed Within a Year
(1)Where any promise in a contract cannot be fully performed within a year from the time the contract is made, all promises in the contract are within the Statute of Frauds until one party to the contract completes his performance.
(2)When one party to a contract has completed his performance, the one-year provision of the Statute does not prevent enforcement of the promises of other parties.
R2 159 Misrepresentation Defined
A misrepresentation is an assertion that is not in accord with the facts.
R2 160 When Action Is Equivalent to an Assertion (Concealment)
Action intended or known to be likely to prevent another from learning a fact is equivalent to an assertion that the fact does not exist.
R2 161 When Non-Disclosure Is Equivalent to an Assertion
A person’s non-disclosure of a fact known to him is equivalent to an assertion that the fact does not exist in the following cases only:
(b)where he knows that disclosure of the fact would correct a mistake of the other party as to a basic assumption on which that party is making the contract and if non-disclosure of the fact amounts to a failure to act in good faith and in accordance with reasonable standards of fair dealing.
(d)where the other person is entitled to know the fact because of a relation of trust and confidence between them.
R2 162 When a Misrepresentation Is Fraudulent or Material
(1)A misrepresentation is fraudulent if the maker intends his assertion to induce a party to manifest his assent and the maker
(a)knows or believes that the assertion is not in accord with the facts, or
(b)does not have the confidence that he states or implies in the truth of the assertion, or
(c)knows that he does not have the basis that he states or implies for the assertion.
(2)A misrepresentation is material if it would be likely to induce a reasonable person to manifest his assent, or if the maker knows that it would be likely to induce the recipient to do so.
R2 163 When a Misrepresentation Prevents Formation of a Contract
If a misrepresentation as to the character or essential terms of a proposed contract induces conduct that appears to be a manifestation of assent by one who neither knows nor has reasonable opportunity to know of the character or essential terms of the proposed contract, his conduct is not effective as a manifestation of assent.
R2 164 When a Misrepresentation Makes a Contract Voidable
(1)If a party’s manifestation of assent is induced by either a fraudulent or a material misrepresentation by the other party upon which the recipient is justified in relying, the contract is voidable by the recipient.
(2)If a party’s manifestation of assent is induced by either a fraudulent or a material misrepresentation by one who is not a party to the transaction upon which the recipient is justified in relying, the contract is voidable by the recipient, unless the other party to the transaction in good faith and without reason to know of the misrepresentation either gives value or relies materially on the transaction.
R2 167 When a Misrepresentation Is an Inducing Cause
A misrepresentation induces a party’s manifestation of assent if it substantially contributes to his decision to manifest his assent.
R2 177 When Undue Influence Makes a Contract Voidable
(1)Undue influence is unfair persuasion of a party who is under the domination of the person exercising the persuasion or who by virtue of the relation between them is justified in assuming that that person will not act in a manner inconsistent with his welfare.
(2)If a party’s manifestation of assent is induced by undue influence by the other party, the contract is voidable by the victim.
(3)If a party’s manifestation of assent is induced by one who is not a party to the transaction, the contract is voidable by the victim unless the other party to the transaction in good faith and without reason to know of the undue influence either gives value or relies materially on the transaction.
R2 178 When a Term Is Unenforceable on Grounds of Public Policy
(1)A promise or other term of an agreement is unenforceable on grounds of public policy if legislation provides that it is unenforceable or the interest in its enforcement is clearly outweighed in the circumstances by a public policy against the enforcement of such terms.
(2)In weighing the interest in the enforcement of a term, account is taken of
(a)the parties’ justified expectations,
(b)any forfeiture that would result if enforcement were denied, and
(c)any special public interest in the enforcement of the particular term.
(3)In weighing a public policy against enforcement of a term, account is taken of
(a)the strength of that policy as manifested by legislation or judicial decisions,
(b)the likelihood that a refusal to enforce the term will further that policy,
(c)the seriousness of any misconduct involved and the extent to which it was deliberate, and
(d)the directness of the connection between that misconduct and the term.
R2 179 Bases of Public Policies Against Enforcement
A public policy against the enforcement of promises or other terms may be derived by the court from
(a)legislation relevant to such a policy, or
(b)the need to protect some aspect of the public welfare, as is the case for the judicial policies against, for example,
(i)restraint of trade (§§ 186–188),
(ii)impairment of family relations (§§ 189–191), and
(iii)interference with other protected interests (§§ 192–196, 356)
R2 181 Effect of Failure to Comply With Licensing or Similar Requirement
If a party is prohibited from doing an act because of his failure to comply with a licensing, registration or similar requirement, a promise in consideration of his doing that act or of his promise to do it is unenforceable on grounds of public policy if
(a)the requirement has a regulatory purpose, and
(b)the interest in the enforcement of the promise is clearly outweighed by the public policy behind the requirement.
R2 186 Promise in Restraint of Trade
(1)A promise is unenforceable on grounds of public policy if it is unreasonably in restraint of trade
(2)A promise is in restraint of trade if its performance would limit competition in any business or restrict the promisor in the exercise of a gainful occupation.
R2 187 Non-Ancillary Restraints on Competition
A promise to refrain from competition that imposes a restraint that is not ancillary to an otherwise valid transaction or relationship is unreasonably in restraint of trade.
R2 188 Ancillary Restraints on Competition
(1)A promise to refrain from competition that imposes a restraint that is ancillary to an otherwise valid transaction or relationship is unreasonably in restraint of trade if
(a)the restraint is greater than is needed to protect the promisee’s legitimate interest, or
(b)the promisee’s need is outweighed by the hardship to the promisor and the likely injury to the public.
(2)Promises imposing restraints that are ancillary to a valid transaction or relationship include the following:
(a)a promise by the seller of a business not to compete with the buyer in such a way as to injure the value of the business sold;
(b)a promise by an employee or other agent not to compete with his employer or other principal;
(c)a promise by a partner not to compete with the partnership.
