Requrment that no defenses exist Flashcards
No defense requirement
Even if an agreement is supported by valuable consideration or a substitute, K rights may still be unenforcable if there is a defense
Legal incapacity to K rule and list of defenses
Defendants without capacity can disaffirm K (but don’t have to)
1) Minors (usually anyone under 18)
2) Mental incapacity
3) Intoxicated persons (if other party had reason to know of the intoxication)
What if incapacitated party retains benefits after gaining capacity?
implied affirmation of k
Incapacity “necessaries” exception
An incapacitated party is still liable for necessaries, like food, shelter, clothing, medical care. BUT NOT a K obligation, just reasonable value.
Duress Hypo Example
Usually economic duress, not physical. Two parties in K. One says he won’t fulfill his side of the bargain unless X. Innocent party has no choice.
Economic Duress Elements
1) the party threateens to commit a wrongful act that would seriously threaten the other contracting party’s property or finances
2) there are no adequate means available to prevent the threatened loss
Undue influence elements
1) undue susceptibility to pressure by one party; and
2) excessive pressure by the other party
Ambigiuity/misunderstanding defense
If neither party aware of ambiguitiy: no K unless both parties intended the same meaning
If both parties aware: No k unless “”””
If one party aware: binding k based on what the ignorant party reasoanbly believe to be the meaning of the ambiguity
Mutual Mistake defense
If both parties mistaken about existying facts relating to the agreement, K may be voidable by the adverserly affected party if:
1) concerns a basic assumption (subject matter, not value)
2) has a material effect
3) Party seeking avoidance didn’t assume the risk of mistake
Unilateral Mistake Defense
Mistake will generally not prevent formation of K.
BUT if the nonimstaken party knew or had reason to know of the mistake, K is voidable.
Unconscionability
Allows court to refuse to enforce all or part of K.
(tested at time of contract formation)
1) Unfair suprise and
2) oppressive terms
Fraud defense
K voidable by innocentp arty if they jutifiably relied on it.
Misrepresentation Defense
Even if not fraud- K is voidable by innocent party if (1) justifiably relied on (2) material misrepresentation.
Material if:
1) it would induce a reasonable person to agree; OR
2) the maker knows that it is likeley to induce the particular person to agree
Illegality of defense
If subject matter is illegal, K is void.
Statute of Frauds issue
When is writing required/oral K not enough? When it falls within SoF
Statute of Frauds Categories
MYLEGS
Marriage
Year
Land Sales
Executors
Goods for 500+
Sureties
SOF Marraige
K where marriage is consideration
NOT promises to marry
SOF Year
K IMPOSSIBLE to complete in 1 year
time of actual perfroamnce doesn’t matter
DOESN”T INCLUDE lifetime Ks. Could die in less than a year.
Doesn’t matter how long actual performance is. (Concert example)
SOF Executor
A promise by an executor or administrator to pay the estate’s debts out of their own funds needs writing
SOF Sureties
Promises to pay debt of another. Party must actually owe you.
SOF and contract modifications
Modifications must be in writing ONLY if contract as MODIFIED is within statute
CLauses prohibiting oral modification
UNenforcable in common law Ks
Enforcable in UCC
SOF Land Sale Exceptions
1) Leases of 1 year or less
2) Part performance of real estate Ks
-Payments, possession, improvment (need 2 of 3)
SOF Service COntract exception
FUll perfroamnce of contract satisfies SOF
But partial performance of does not
SOF Sale of Goods K Exceptions
Part performance takes a sale of goods K out of SOF WHen:
1) Goods accepted OR
2) Goods paid for OR
3) Goods specially manufactured (substantial beginning from seller )
If partially paid for or accepted, K is enforceable only to extent of the partial payment or acceptance.
BUT if good can’t be divided (one boat), still SOF
SOF Judicial Admissions Exception
Agreement admitted to under oath are enforceable wihtout writing
Merchants Confirmatory Memo Exception
1) Merchants
2) Agree to K
3) One party sends signed writing containing quantity terms
4) No objection by recipient within 10 days
SOF writing requirement for Goods 500+
1) Quantity Term
2) Defendant’s signature
SOF Writing requirement for common law Ks
1) All material Items (who, what, price)
2) D’s signature
