Void or voidable Circumstances

Question 1

Void vs Voidable

Answer 1

• Void: Of no legal effect - of absolute nullity in relation to OACLLS elements (i.e. SOF, illegal SM, fraud in execution)
• Voidable: valid until declared annulled - capable of being affirmed or rejected at the option of one of the parties (incapacity, fraud on inducement, duress)
• Court to declare rescission and return parties to original position

Question 2

Void/Voidable - MUFFED Reasons

Answer 2

• Mistakes
• Unconscionability
• Fraud
• Fiduciary’s Undue Influence
• Estoppel Defenses
• Duress

Question 3

Void/Voidable - MUFFED - Mistakes - Gral

Answer 3

• When basic assumption/understanding of significant element of contract is not truth
• Usual remedy is rescission
• Can be unilateral or mutual

Question 4

Void/Voidable - MUFFED - Mistakes - Unilateral

Answer 4

• Can be of value or of fact
• Gral rule: Mistaken party bears risk - contract is enforceable

Question 5

Void/Voidable - MUFFED - Mistakes - Unilateral - Exceptions to gral rule of enforceability (2)

Answer 5

1) Other party had actual/constructive (“should have known”) knowledge and failed to correct
2) Other party substantially contributed (if too significant also as possible fraud or unconscionable) i.e. didnt disclose hidden effect that would increase performance cost

Question 6

Void/Voidable - MUFFED - Mistakes - Mutual - gral

Answer 6

• If of minor consequences usually deemed irrelevant
• Remedy usually given when contract is still executory

Question 7

Void/Voidable - MUFFED - Mistakes - Mutual - Specific rules for type of mistake (value or fact)

Answer 7

- Mistake of value: usually not ground for rescission

• Mistake of fact: voidable if of s_uch magnitude_ that there is “no true meeting of the minds” -i.e. purchase of fake art piece

- Mixed value/fact: deemed to allow for rescission - i.e. contract for land though to have oil and didnt

Question 8

Void/Voidable - MUFFED - Unconscionability - gral

Answer 8

• Contract TOO unfair/oppressive/One sided - shock the conscience beyond reasonable standard of fair dealing
• Be both Procedural and Substantive unconscious
• Applicable mostly on consumer contract - rarely on commercial contracts
• Burden on “victim”

Question 9

Void/Voidable - MUFFED - Unconscionability - Procedural

Answer 9

• Unfair high pressure at time of bargain
• Not meaningful negotiated choices

Question 10

Void/Voidable - MUFFED - Unconscionability - Substantive

Answer 10

• Oppressive harshness of outcome (i.e. excessive price)

Question 11

Void/Voidable - MUFFED - Unconscionability - UCC Treatment

Answer 11

• good faith required from all contracting parties
• Limitation of dx on personal injury from consumer goods is deemed per unconscionable and requires seller to show furness (Shift of burden)
• allowed for commercial loss

Question 12

Void/Voidable - MUFFED - Fraud/Misrepresentation Types (3)

Answer 12

1) In the execution
2) In the inducement - misrepresentation of contract info - FIRD (false statement of material fact, intention to deceive, reliance, dx)
3) Fraudulent Concealment: as omission or non-disclosure of material fact or hidden defect

Question 13

Void/Voidable - MUFFED - Fraud in the inducement - FIRD elements

Answer 13

1) False statement of material fact (rise above mere puffery)
2) Intention to deceive (scienter)
3) Reasonable Reliance in false statement
4) Damages: use “benefit of bargain” as measure for recovery

Question 14

Void/Voidable - MUFFED - Fiduciary’s unde influence

Answer 14

• For position of special confidence and trust
• Situations (3): Undivided Loyalty, Unfair Persuasion, and possible constructive trust

Question 15

Void/Voidable - MUFFED - Fiduciary’s unde influence - Undivided Loyalty

Answer 15

• Duty of loyalty, obedience, good faith, due care + Disclose fact
• Avoid conflict of interest, related business trasnactions,

Question 16

Void/Voidable - MUFFED - Fiduciary’s unde influence - Unfair persuasion

Answer 16

• Abuse of position of trust
• Question of fact for jury
• Burden of fiduciary to prove fairness of transaction

Question 17

Void/Voidable - MUFFED - Fiduciary’s unde influence - Constructive Trust

Answer 17

• Remedy by court when legal property acquired over property thourg undue influence, fraud, duress, theft

Question 18

Void/Voidable - MUFFED - Estoppel Defenses

Answer 18

• Defense to enforcement
• Different from promissory estoppel in that false statement of fact (not promise)
• Can be equitable or judicial

Question 19

Void/Voidable - MUFFED - Estoppel Defenses - Equitable

Answer 19

P deliberately did or say something that generate reasonable reliance that right would NOT be enforced in the future

Question 20

Void/Voidable - MUFFED - Estoppel Defenses - Judicial

Answer 20

P had previously gave sworn testimony on court inconsistent with position in subsequent legal position

Question 21

Void/Voidable - MUFFED - Duress - Gral

Answer 21

• Party coerced into consent bc of improper threat of physical harm or life to himself or family
• Reasonable person standard
• Rarely allowed as economic duress and when other party created the desperate scenario: i.e. artificial inflation of insulin prices