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143554
Defenses Against Formation
Description
Contract Law Mind Map on Defenses Against Formation, created by Alex Cooper on 04/07/2013.
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contract law
contract law
Mind Map by
Alex Cooper
, updated more than 1 year ago
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Created by
Alex Cooper
about 11 years ago
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Resource summary
Defenses Against Formation
LACK OF CAPACITY
Minors under 18
Intoxicated
Mentally incompetent
General rule: Defendant can disaffirm contract
Implied affirmation - retaining benefit after (re-)gaining capacity
Exception: Incapacitated party liable for reasonable value of necessaries
ECONOMIC DURESS
Requires:
i) Threat to break the existing contract
ii) Only reason Buyer agreed to second deal was to get 1st deal done
iii) No reasonable alternative
MISREP / NON-DISCLOSURE OF MATERIAL FACT
Rule: Even honest misrep / non disclosure a fatal flaw in agreement process if it goes to a material fact
AMBIGUITY / MISUNDERSTANDING
Result: No contract
Exception: if one party knows or has reason to know of ambiguity / misunderstanding - contact on innocent party's terms pervails
MISTAKE ABOUT MATERIAL FACT
Unilateral mistake
Contract enforceable
Mutual miskate
Contract excused
Exception: Mistake as to value generally not considered material = contract enforceable
NO CONSIDERATION
Past consideration
MBE: No consideration
NY: Consideration if:
i) expressly stated in a signed writing
ii) can be proven
Adequacy of consideration is irrlevant
Illusory promise is unenforceable
e.g. "buy as many as I want"
Contract modification
Common Law
Preexisting Duty Rule: new consideration is required
NY: no new consideration necessary if modification is in a signed writing
If promise made by 3rd party = enforceable
Art. 2 of UCC
Need Good Faith only
Partial payment of debt
Debt due and undisputed
MBE: promises to reduce debt unenforceable - consideration needed
NY: consideration not needed if promise to forgive debt in signed writing
Time barred debt
Written promise to pay is enforceable
PROMISSORY ESTOPPEL
Consideration substitute
PUBLIC POLICY
Covenant not to compete
Courts will narrow if acts as restraint of trade
Scope of covenant
Need for covenant
Exculpatory clause
Cannot eliminate liability for gross negligence
UNCONSCIONABILITY
Substantive
Procedrural
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