Contracts--Justice Principle

Front 1

Justice Principle

Back 1

law refrains from enforcing promises when considerations of justice override the prima facie justification for enforcing them.

Front 2

Domain of the Freedom to Contract

Back 2

There are restrictions imposed by law on:
1. kinds of people who can K
2. types of Ks that can be enforced b/c of public policy

Front 3

2. Restriction on Subject of K because it is against Public Policy

Back 3

Ks are void and unenforceable as against public policy when


interest in enforcement

is clearly outweighed by

public policy against its enforcement

Front 4

Application of balancing test

Back 4

1. identify pp against the enforcement through:
-statutory-based policies
-non-statutory, "free-floating" policies(restraint of trade, impairment of family relations, interference with other protected interests)

2. Then identify "interest in enforcement" (parties expectations)

Balance and weigh 1 and 2.

-see Baby M where pp outweighed the enforcement of surrogacy K

Front 5

Mutual Mistakes

Back 5

K is voidable by the harmed party unless

that party bears the risk of mistake, which occurs when

they have only limited knowledge w.r.t. the facts to which the mistake relates but treat this "limited knowledge" as sufficient. e.g. where someone buys a stone that "could be topaz or could be a diamond" and doesn't conduct a reasonable investigation.

Front 6

Unilateral Mistakes

Back 6

K voidable by harmed party unless:
1. that party bears the risk of mistake AND
2. the other party had reason to know of mistake or his fault caused mistake

Front 7

Misrepresentation

Back 7

K is voidable if assent is induced by fraudulent or material misrepresentation.

Front 8

When is Misrepresentation=Non-disclosure

Back 8

1. confidential, trust or fiduciary relationship
2. disclosure is necessary to prevent a prior assertion from being a misrepresentation
3. when party knows that disclosure would:
1. correct the mistake of the other party AND
it amounts to failure to act in good faith and in accordance with standards of fair dealing.

Front 9

Mentally ill or defective restriction

Back 9

if due to mental illness or defect:
1. unable to understand in a reasonable manner the nature and consequences of the transaction [Cognitive Test]

OR

2. unable to act in a reasonable manner in relation to the transaction AND the other party has reason to know of the condition [Qualified Volitional Test]
-ortelere*

Front 10

Intoxicated

Back 10

other party must have reason to know that because of intoxication the party is:

1. unable to understand in a reasonable manner the nature and consequences of the transaction

OR

2. unable to act in a reasonable manner in relation to the transaction.