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10 Cards in this Set
- Front
- Back
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________ whose formation, object, or performance is so iniquitous, against the law of the land, or contrary to public policy, that no court will entertain or enforce it. Technically, it is a 'no contract.' In situations where two wrong doers enter into an illegal contract and one of them takes advantage of the other, law normally will not intercede to rectify the situation.
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Illegal Contract
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________ or coercion or blackmail will invalidate a contract when someone was threatened into making the agreement.
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Duress
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________ is when a party forced by another party to enter into an agreement by taking advantage of a special or particularly persuasive relationship. The resulting contract might be found unenforceable.
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Undue Influence
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________ occurs during the negotiation process, any resulting contract will probably be held unenforceable. The idea here is to encourage honest, good faith bargaining and transactions. Falsehoods commonly occur when a party says something false (telling a potential buyer that a house is termite-free when it is not) or, in some other way, conceals or misrepresents a state of affairs (concealing evidence of structural damage in a house's foundation with paint or a particular placement of furniture).
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Misrepresentation
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________ is essentially misrepresentation through silence -- when someone neglects to disclose an important fact about the deal. Courts look at various issues to decide whether a party had a duty to disclose the information, but courts will also consider whether the other party could or should have easily been able to access the same information. It should be noted that parties have a duty to disclose only material facts. But if Party A specifically asks Party B about a fact (material or non-material), then Party B has a duty to disclose the truth.
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Nondisclosure
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________ means that a term in the contract or something inherent in or about the agreement was so shockingly unfair that the contract simply cannot be allowed to stand as is. The idea is to ensure fairness, so a court will consider: whether one side has grossly unequal bargaining power whether one side had difficulty understanding the terms of the agreement (due to language or literacy issues or whether the terms themselves were unfair.
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Unconscionability
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Contracts can be found unenforceable on grounds of ________ . That the contract could pose harm to society as a whole or an agreement that offends the "public sensibilities" (for example, contracts involving some sort of sexual immorality).
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Public Policy
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Sometimes a contract is unenforceable not because of purposeful bad faith by one party, but due to ________ on the part of one party or both parties (called a "mutual mistake"). In either case, the mistake must have been about something important related to the contract, and it must have had a material (significant) effect on the exchange or bargaining process.
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Unilateral Mistake
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________ are measured by the difference between the contract price and the market price when the seller provides the goods, or when the buyer learns of the breach.
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Sale of Goods Compensatory Damages
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________ is calculated by the actual loss caused by the breaching party. The non-breaching party is obligated to mitigate, or minimize, the amount of damages to the extent reasonable. Damages cannot be recovered for losses that could have been reasonably avoided or substantially ameliorated after the breach occurred. The non-breaching party’s failure to use reasonable diligence in mitigating the damages means that any award of damages will be reduced by the amount that could have been reasonably avoided.
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Limitations on Compensatory Damages
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